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.