THIS YEAR’S START IS THE SLOWEST START TO A YEAR SINCE 2019, YET THE LOWER MORTGAGE RATE ENVIRONMENT AND IMPROVED AFFORDABILITY HAS THE ABILITY TO JUMPSTART DEMAND.
THE 2026 START
WITH THE HIGHEST INVENTORY AT THE START OF THE YEAR SINCE 2020, THE MARKET IS THE SLOWEST SINCE 2019.
Trader Joe’s Chocolate Croissants have become a popular breakfast choice for shoppers. Their description showcases how they sell so many: “Made with creamy butter and filled with rich, semisweet Belgian chocolate, Trader Joe’s Chocolate Croissants bring high-end bakery quality to your home kitchen with minimal effort.” They are initially frozen solid. After placing them on a cookie sheet and allowing them to proof overnight, many wonder how in the world the small, hard squares will turn into something edible. After an hour, they do not change at all and remain frozen. Something magical happens by morning. They triple in size! After popping them into the oven for 20 minutes and letting them cool for 10, the flaky croissant filled with chocolate goo is ready to eat. They are perfect!
Similarly, the Orange County housing market starts frozen at the beginning of every year. For those buyers and sellers stepping into today’s housing market, many will wonder how in the world anything will sell. There is a holiday hangover, and most everyone is still distracted with New Year’s resolutions. Yet, over the next several weeks, after shaking off the holiday fog and leaving most resolutions behind, the housing market will magically heat up, seemingly overnight. The Holiday Market continues to run through mid-January. Housing will thaw and rapidly heat up by the end of January, as demand accelerates much faster than the supply of available homes.
This year is exceptionally chilly with the coldest start since 2019, when the Expected Market Time (the number of days it takes to sell all Orange County listings at the current buying pace) reached 152 days. Today’s 85-day Expected Market Time reading is similar to 2017 (84 days), 2020 (82 days), and 2023 (84 days). The speed of the market is determined by supply and demand. Demand has not changed much over the past several years, ever since the Federal Reserve rapidly increased the Federal Funds Rate for 11 consecutive meetings between 2022 and 2023. Demand has been muted due to affordability constraints. The big annual difference in speed has come on the supply side.
Joy Lee
949.290.4903
joy@heyjoylee.com
DRE# 02102122