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.”

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OC Houses Rank As Nation's 3rd Most Expensive

Orange County again has the nation’s third highest median selling price for single-family homes, according to National Association of Realtors data.

Orange County’s second quarter median price was $713,200, up 3 percent in a year. Orange County has ranked third since last year, when it jumped out of fourth place past Honolulu.

The nation’s priciest single-family homes are found in Silicon Valley, where the median hit $980,000 in the second quarter, up 9 percent in a year.

San Francisco was next at $841,600, up 9 percent in a year. Honolulu was fourth behind Orange County at $698,600, up 3 percent in a year. Another California market, San Diego, was fifth at $547,800 up 9 percent in a year.

Some may quibble with this ranking, as the high-cost New York metropolitan area ranks only sixth with a median price of $473,200, up 2 percent in a year. But the Realtors don’t track the pricey co-op apartment living that dominates the city real estate market. Plus, the metro area does include many relatively affordable homes in the distant suburbs.

No matter the ranking, all these markets look expensive compared to the rest of the nation. The U.S. median price was $229,400, up 8.2 percent in a year.

If you’re thinking about affordable markets with momentum, data from 2015’s second quarter tells you to look to the south and east.

The biggest percentage winners year-over-year were three towns in Florida. Palm Bay-Melbourne-Titusville had the largest gain, up 20 percent in a year to $165,000. Port St. Lucie was up 20 percent to $184,000. And Sebastian-Vero Beach rose 19 percent to $191,000.

Two North Carolina markets were next. Raleigh was up 17 percent to $247,900, followed by Greensboro-High Point – up 16.3 percent to $159,800. Gulfport-Biloxi, Miss. was sixth, with an increase of 16.2 percent to $131,300.

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