OC Home Inventory Off 38% Versus Historical Winter Trends

Orange County home sellers are still missing in action, with late winter’s supply of homes for sale running 38 percent below normal.

ReportsOnHousing.com says 5,444 local homes were listed for sale in brokers’ networks as of Thursday. That’s up 173 homes in the past two weeks, a 3 percent jump – part of the annual awakening of the typical house seller from the wintertime hibernation.

The recent burst in Orange County listings is part of an 1,048 increase in the supply of homes for sale since the year began. But this seasonal surge is nothing new, and it’s nothing to brag about.

Consider that in the first 10 weeks of 2015, sellers put 1,093 homes on the market – 4 percent more than this year’s late-winter supply boost. And Orange County had 155 fewer homes on the market on Thursday vs. a year ago.

This housing shortage has become a post-recession norm.

Since 2005, the average inventory in early March was 8,766 homes for sale. So, shoppers in 2016 have 3,322 fewer homes to choose from vs. a typical late-winter house-hunting endeavor. Or a 38 percent shortage!

This thin inventory is not just a 2016 woe, as it’s the fifth year property owners have kept the “For Sale” signs off the front lawns. Early March supplies have averaged a light 5,349 homes since 2012.

“Realtors are not exaggerating when they state that there are not enough homes on the market. It is an absolute fact,” ReportsOnHousing analyst Steve Thomas wrote. “With extremely favorable interest rates, there is tremendous demand. Strong demand coupled with a low supply means that the real estate market favors sellers, not buyers.”

Thomas calculates the market’s speed with his “expected market time” – how long it would theoretically take to sell out the entire inventory at the current pace of new escrows opening. As of Thursday, it was 61 days – “a slight seller’s market,” in Thomas’ eyes – vs. 59 days a year ago.

One reason for the statistically slower market, despite low inventories? Buyers seem frustrated, with 5 percent fewer new escrows opened in the 30 days ended Thursday compared to a year ago.

Certainly, limited supply is partly to blame.

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Rules of Attraction: 11 Ways to Create Curb Appeal

rah once said, "Your home should be the thing that rises up to meet you." That's serious curb appeal. "We live in a crazy world," says Laura Morton, certified landscape professional and owner of Laura Morton Design in West Hollywood. "We have busy days ... when you come back home you should feel that you've arrived somewhere that is already putting you in a good mood." If this scenario doesn't ring a bell, read on. Curb appeal can be cultivated, and it may be easier than you think.

Consider a new approach

"The walkway is often broken, cracked or too narrow," says Morton. "If it's too straight, it's more like a runway — something that gets you from the curb to the door as fast as possible ... a slash of concrete." Repair the path or create a new one. "Cut narrow bands out of the walkway," Morton suggests, "or remove a 2- or 3-foot strip along one side and make it wider."

Pittock sconce porch view (Justin Gollmer / Rejuvenation)

Lightbulb moment

Change the light fixtures. Consider sconces, or replace existing fixtures with something more complementary. Another bright idea: Use lightbulbs that cast a warm glow.

Work with your house, not against it

Mike McIver, a Long Beach-based landscape designer, says choose elements that match the home's style. "If it's a Spanish home, Mediterranean plants make sense. Use flagstone and terra cotta pots to mimic the roof." Pick materials, shapes and colors used in the design of the home.

Don't cram

Allow breathing space. Plant hedges, trees and shrubs with an eye to how large they grow. "Don't stick them right up against your walls," says Morton. "Give them room to open up and be soft, rather than this look we see of everything being trimmed within an inch of its life."

Create a palette

"Just like the inside of your home, use a cohesive color palette and style to create continuity," McIver says. Consider a new color for the door or trim. A big overhaul isn't always necessary.

Detail oriented

"Sometimes it's just the addition of an ornamental piece," says Morton. "A new pot or a doormat can make a difference." New address numbers, an updated doorbell, knocker, mailbox, porch bench or rocker create a sense of style.

Double rocker (Jason Deymonaz / Rejuvenation)

Maintenance

"Sometimes people have too much going on in the front, and it feels uncared for," says Morton. "It could just need a fresh coat of paint on the fence or a power wash." Clean windows, a power-washed driveway, repaired gates and an uncluttered porch make an impact.

Avoid straight lines

"I think the most common disasters I see are homeowners who line their walkway with annuals or Malibu lights every 2 feet, like regimented soldiers, to frame the walkway." You are not landing a plane. Instead, use a variety of plants, and place them away from the path.

Grow character

"Low branching, multi-trunk trees, like olive trees, tend to have much more character and excitement than a single trunk," says McIver. Consider novelty foliage such as a flowering tree or special palm.

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About the garage ...

A December report by the National Assn. of Realtors revealed that a new garage door is one of the exterior features most appealing to potential buyers and recoups a whopping 87% of its cost upon resale. Homeowners also named it the exterior upgrade that brings the most happiness.

Driveway

"I'm always trying to camouflage driveways or make them softer," says McIver. "I like to incorporate ribbons, either in grass or stone." If you have the budget, consider incorporating similar stone from the walkway to create cohesiveness.

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Redfin Predicts the Hottest Neighborhoods of 2016

Thanks to the data we track on visits to Redfin.com and which homes our customers mark as their favorites, we don’t need to wait until Spring to find out which neighborhoods across the country will be hot in 2016. Based on what our agents told us about these neighborhoods, 2016’s list is all about access to public transit, affordability and charm.

Affordability has topped buyers’ lists of concerns for the past year, and many who dropped out of the market last year because of it are back with more experience under their belts. They’ve done their research and identified those pockets that are still affordable, but also offer the stores, coffee shops and short rides to downtown that make communities livable. This increasingly rare combination can be found in Ukrainian Village in Chicago, Eastwood in Nashville, Ericsson in Minneapolis and other hot ‘hoods across the country.

“For the first time, the San Francisco Bay Area is absent from Redfin’s top 10 hottest neighborhoods list,” said Nela Richardson, Redfin’s chief economist. “After the median sale price surpassed a million dollars in March and inventory dropped to historic lows, San Franciscans have been feeling uninspired by local housing prospects. In fact, one in four Bay Area users of Redfin.com are now searching for homes in other cities. San Diego and Los Angeles, home to some of the the nation’s highest real estate prices, also failed to make the top ranks this year.”

Another trend that has emerged in this year’s hottest neighborhoods is that buyers are looking for homes and neighborhoods with character. Redfin agents report that many buyers are bypassing “cookie cutter” homes in neighborhoods that didn’t make our rankings for the charming original architecture and tree-lined streets that give neighborhoods like Ukrainian Village in Chicago and Mount Pleasant in Washington, D.C their unique personalities.

What Makes a Neighborhood Hot?

Redfin’s Hottest Neighborhoods is a prediction based on the most recent growth we’ve seen in page views and favorites on Redfin.com. We checked in with Redfin agents around the country to find out what’s been driving these trends. Hot neighborhood alums such as Phinney Ridge (2014) in Seattle, Bernal Heights (2014) in San Francisco and Highland Park (2013) in Los Angeles have since become some of the most desirable areas to live in the country.

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House Hunters Have Few Orange County Choices As Year Starts

Orange County house hunters face a big challenge as 2016 gets going: a thin selection of homes to choose from.

ReportsOnHousing.com says there were 4,396 existing homes listed for sale in the brokers network as the year started, down 12 percent from a year ago. It’s the second-lowest supply at the start of a year since 2005. In the past decade, supply has averaged 7,298 listings at the beginning of the year.

“There’s definite pent up demand for homes, but just not enough inventory to match. Typically, that is a recipe for appreciation, low supply and high demand, but not in today¹s market,” writes ReportsOnHousing’s Steve Thomas.

“Instead, buyers are approaching the housing market much more cautiously. They are very aware that homes have already appreciated considerably since 2012, so they are careful to not overpay,” he wrote.

Supply has improved slightly in the past two weeks to 4,576 listings, Thomas noted. But that’s still 679 less than a year ago.

That means Thomas’ estimate of selling time – comparing supply to new escrows opened in past 30 days – was just 86 days as of last Thursday vs. 99 days a year ago.

Thin supply may be dimming demand, as measured by new escrows opened – 1,593 in the 30 days ended Jan. 14, six below a year ago.

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$630,000: Orange County Median Home Price in December is Highest Since Great Recession

By the numbers alone, Orange County’s housing market just had an incredible month, with the highest prices since the Great Recession and the busiest December in a decade.

But then again, new housing numbers out Tuesday don’t tell the whole story.

A surge in pricier new home sales helped account for the bump in pricing. And new loan-disclosure rules that delayed the closing of home sales in November resulted in a big jump in December transactions.

Still, local market watchers said, rising employment and continued low mortgage rates also had a hand in boosting the market in December.

Irvine-based home-data firm CoreLogic reported the median price of an Orange County home – or the price at the midpoint of all sales – was $630,000 in December. That’s up 8.2 percent from December 2014, the highest annual home-price gain in more than a year.

That’s also the highest median price for any month since the housing bubble burst eight years ago, and just 2.3 percent below the all-time high of $645,000 reached in June 2007.

In addition, 3,206 houses, condos and townhomes – new and existing – changed hands last month, up 13.8 percent, CoreLogic figures show. That’s the highest tally for any month since July and the most for a December since 2005.

December sales typically rise from November as builders and others rush to get housing transactions completed before year’s end. But last month’s sales jumped 31 percent from November, twice the average November-December increase.

Industry insiders across the state are blaming new loan-disclosure rules known as “TRID,” saying December stole some of the sales that normally would have closed in November because of delays those rules caused.

“I don’t think (the entire sales jump) would have happened without TRID,” CoreLogic analyst Andrew LePage said. “(Sales) would have increased. It just wouldn’t have been as big an increase.”

In addition, an unusually big year-end rush to get new home sales recorded also skewed the overall median price upward.

CoreLogic reported that Orange County builders closed 517 sales last month, up 24 percent from December 2014. By comparison, existing home sales, which sell for less, increased just 12 percent last month.

“It’s a change in the mix,” said housing economist G.U. Krueger. “The new housing market is gaining market share, which is pushing up the overall median home price.”

Pete Reeb, a principal with Irvine-based John Burns Real Estate Consulting, said new home sales are up because there is more building and more publicly traded builders who are under the gun to to bolster their 2015 balance sheets. Orange County had 111 projects at the end of the third quarter, up from about 100 at the start of the year, he said.

The median new-home price increased 2.1 percent year-over-year last month to $875,000, CoreLogic reported. But prices for existing homes were up even more. The median price for an existing house was up 4.9 percent to $670,000; the median for an existing condo increased 7.7 percent to $420,000.

Rising house prices are pushing a growing number of buyers into the townhome and condo market.

“Most people have champagne taste and a Coca-Cola budget,” said Ron Denhaan of Realty One Group in Mission Viejo, explaining that demand is highest for three-bedroom, detached houses. “But you have a big cross-section of people who can’t afford to buy that. So they’re looking at townhomes and condos for $500,000 or less.”

Because of high house prices, added Steve Thomas of ReportsOnHousing.com, “the lower end of the market ... is the next segment to ignite.”

Home prices and sales also soared throughout the rest of Southern California, CoreLogic reported. The region’s median home price was up 6.7 percent year-over-year to $443,000, the highest since October 2007. Regional home sales increased 9.8 percent to 20,890 transactions, the most for any December since 2009.

The Southern California median was Price and sales gains were recorded as well in all six Southern Californian counties, although Orange County recorded the biggest percentage gains in both categories.

Elsewhere, prices were up from 3.4 percent in Ventura County to 8.1 percent in Los Angeles County. Sales rose from 7.9 percent in Ventura County to 11.4 percent in San Bernardino County.

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