A HOUSING COLD FRONT
There is a scarcity of homes available, a lack of demand, and very few closed sales even though home values are on the rise and most homes are selling quickly.
Orange County Housing Report | It’s a Cool, Cool Summer
California experienced a very unusual May and June this year. Southern California was subject to some of the coldest daytime temperatures in the last 40 years, far below their norm. There were days without sunshine. The marine layer was so thick, morning commuters were welcomed by a cool drizzle. While the rest of the country roasted, Californians grabbed their sweatshirts and wondered if summer would ever arrive.
The housing market has experienced a similar cold front where it seems shrouded in a thick fog that just will not clear. The higher mortgage rate environment has impacted so many real estate statistics and has resulted in a very cool summer. The active inventory, demand, and closed sales pale in comparison to when housing felt “normal” before COVID.
Many would intuitively think that the biggest impact would be in demand, yet the supply of available homes to purchase has suffered the largest blow. The inventory started off in January 46% below the 3-year average before COVID (2017 to 2019). The difference grew as the year progressed, and the supply failed to rise much at all. Today is 63% lower than that average, sitting at 2,475 homes compared to 6,753 when Orange County felt normal. Today’s level is the lowest inventory for a start to August since tracking began in 2004, even slightly lower than 2021. The low supply in 2021 led to a historic low start to 2022. Similarly, if nothing changes for the remainder of the year, 2024 may break that record low.
