Good Afternoon -

Summer is winding down, autumn is fast approaching, and the Orange County housing market is following a normal pattern for this time of year. The growth in the active inventory has slowed, but still has not reached a peak for 2010. The number of homes pending sale has increased, but remains 504 less than last year at this time. From here, we can expect that equity sellers (those who have equity in their homes) will begin to remove their homes from the market and wait until the better spring market to resume their efforts. We can also expect a slow decline in demand until after the first couple of weeks of the new year.

Over the last two weeks our active inventory has increased by 236 homes to a total of 11,650 homes for sale. Demand has increased by 30 pending sales to a total of 3,002. Our expected market time increased slightly from 3.84 months of inventory two weeks ago to 3.88 months of inventory today. The inventory of distressed properties, as a segment of the overall inventory, has increased by 182 homes to a total of 3,757. The number of foreclosed homes for sale within the active distressed inventory increased by 6 homes, and now stands at 659 for all price ranges in all of Orange County.

For more in depth analysis of the Orange County housing market please see the Orange County Housing Report below.

Additionally, here is this month's special report: 49 Essential Tips Every Home Buyer Should Know:

http://www.tonydoveonline.com/august2010.html

Enjoy a wonderful rest of your week!

Sincerely,


Tony Dove, REALTOR®

Direct: (714) 283-1116
Office: (714) 282-4300
Toll Free: (800) 615-2707
Email: Tony@TonyDove.com
Website: www.TonyDoveOnline.com
Blog: www.LocalRealtyDigest.com

Summer is winding down and "back to school" shopping is in vogue, and the real estate market is following a normal pattern for this time of year.

The Orange County housing inventory continued to grow over the past couple of weeks, adding an additional 236 homes and now totals 11,650. This is the highest number of homes for sale since December 2008. Last year at this time there were only 8,531 homes on the market, 3,119 fewer than today. With school starting, many homeowners realize that the best time of year to sell has passed them by. There are a lot of equity sellers on the market, nearly 7,900 or 68% of the active market. As more of these equity sellers come to understand the market realities, we can expect that many of them will opt to remove their homes from the market for the remainder of 2010.

For homes priced below $1 million, the expected market time is 3.34 months. This price range represents 80% of the active inventory and 93% of demand. For homes priced above $1 million, the expected market time is 10.48 months, the higher the range, the slower the expected market time. This price range represents 20% of the active inventory, but only 7% of demand. The slowest price range, homes priced above $4 million, has an expected market time of 26 months. The hottest market in Orange County is Talega with an expected market time of only 2.22 months. The slowest market in Orange County is Corona del Mar with an expected market time of 11.5 months and an average list price of $3.5 million. Last year at this time the expected market time was 2.43 months.

Demand, the number of new pending sales over the past month, increased by only 30 homes in the past two weeks, a 1% increase, and now totals 3,002 pending sales. This is the first time that demand has surpassed 3,000 pending sales since the beginning of July; however, we are still 25% below the April 2010 peak of 3,979 pending sales. Last year at this time demand was at 3,506 pending sales, 504 more than today. From here, we can expect demand to slowly drop as we enter the autumn market, from the start of school through the pleas of "trick or treat." From there, housing demand will cool further as we enter the Holiday market, from Halloween through the first couple of weeks of the New Year. There are a lot of distractions during the holidays and real estate typically is placed on the back burner.

There really isn't a "normal cycle" for predicting the level of the distressed inventory throughout the year. When homeowners owe more than their homes are worth and they can no longer afford their monthly payments, they place their homes on the market as short sales regardless of the time of year. Likewise, banks place foreclosures on the market when they have completed the foreclosure process and prepare the homes for sale. We are all acutely aware that there is a "shadow inventory" of homes. According to various reports the "shadow inventory" totals between five and seven million homes in the U.S. This shadow inventory must be worked through, but it will not become a tsunami of distressed properties to hit the market all at once. Instead, we are going to witness slow increases and drops in the distressed inventory over the next few years. This slow absorption will not pull down values like it did at the beginning of this downturn, but, it will keep a lid on any substantial appreciation. Once employment improves, the pathway to an eventual healthy and stable recovery will develop. The distressed inventory increased by 182 homes in the past two weeks, the largest increase since December of 2008, and now totals 3,757 homes. Foreclosed properties, as a part of the overall distressed inventory, increased by only 6 homes in the past two weeks and now total 659. The expected market time for foreclosed properties is 1.82 months. There are an additional 176 short sales in the past two weeks and they now total 3,098. The expected market time for short sales is 2.99 months.

Source: Steven Thomas, President, Altera Real Estate