THE 2024 START
WITH THE SECOND-FEWEST HOMES TO START A YEAR SINCE TRACKING BEGAN IN 2004, THE ORANGE COUNTY HOUSING MARKET IS ALREADY HOTTER THAN PRE-COVID YEARS.
Farmers markets are growing in popularity. There are plenty of booths and crowds of people eager to shop outdoors and support the community even in the middle of winter. Those who have frequented them for years know January is not a great month for fruits. The selection is limited mainly to citrus. It is not the season for peaches, plums, melons, pineapple, berries, or apples. Squeezing between the crowds reveals half-empty shelves with very few options.
That is precisely what buyers are facing at the start of 2024. The Orange County housing shelves are half empty. It is tough being a buyer looking for a home today with higher mortgage rates and very few options to purchase. Demand is muted due to affordability constraints and fewer FOR-SALE signs. Still, the inventory crisis eclipses today’s diminished demand, resulting in a market that already feels hot at the start of January.
After a late but muted inventory peak in 2023 at 2,496 homes, the lowest peak since tracking began in 2004, the inventory dropped by 28% to where it sits today at 1,785. That is the second-lowest start to a year behind 2022. There were 42% more homes available last year, with 2,530 homes available, which is still very low compared to long-term averages. The average start from 2013 through 2020 was 4,421, a staggering 147% more. That is an extra 2,636 available homes. Contributing to the supply scarcity is the fact that fewer homeowners are willing to give up their underlying, low, fixed-rate mortgages. In 2023, there were 16,151 missing FOR-SALE signs compared to the 3-year average before COVID (2017 to 2019), 41% fewer. Mortgage rates are anticipated to drop this year, and the further they fall, the more homeowners will be more inclined to sell their homes.
