No Market Correction 'Anytime Soon'

Demand for Orange County homes, as defined by market watcher Steve Thomas, is at a nine-month low.

But don’t worry, it’s just part of another seasonal, post-summer slowdown, notes Thomas in his biweekly ReportsOnHousing.

There have been 2,537 new pending sales opened in the last 30 days, as of last Thursday. That’s down 4 percent in two weeks and the lowest since January. But this has been a relatively strong year for housing, with this count of new escrows up 10 percent from a year ago, Thomas notes.

Sellers are losing interest, too. For-sale inventory on the brokers’ listing network was 6,959 on Thursday, down 1 percent in two weeks and off 9 percent in a year. Inventory was above 7,000 for only two months in 2015 vs. five-and-a-half months in 2014.

“Buyers often mistaken this slower season as the beginning of a major market slowdown, one that will ultimately lead to a price correction,” Thomas writes. “Current data and trends simply do not support a housing correction anytime soon.”

Thomas calculates “market time” a measurement that shows how long it would theoretically take to sell all inventory of listed homes at the pace of new escrows being opened. Last Thursday, market time was 82 days – up from 54 days amid the traditional strong spring shopping season in April. But a year ago, market time was 100 days.

Thomas describes current conditions by no means a buyer’s market rather “a slight seller’s market, one where sellers can call more of the shots when it comes to the terms of a contract.”