By Gary A. Miller
We continue to exist in a low-inventory housing market. In the first five months of 2023, there have only been 268 closed home sales in southern Orange County. In those same months of 2022, 387 homes were sold. There were 474 sold in the same time period of 2021. Even in 2020 when COVID first impacted our world, there were 346 sales in the first five months.
This inventory shortage contributes to the continued increase in home prices in the area, even as mortgage rates have stayed on the high side of what we have come to expect.
However, even in higher-rate/lower-inventory markets, people still need to buy homes – the family has grown due to having a child or taking care of a parent, the person who needs to downsize after the loss of a loved one, or the new university employee moving to town.
With this article, I analyze the types of homes that have sold so far in 2023 and the associated price points and days-on-market (DOM) with those homes. The table below compares the types of homes sold in 2023 to comparable periods of time in recent years. The table covers January 1 to May 31 in southern Orange County, defined here as the zip codes of 27510, 27514, 27516, and 27517 within the county boundaries.
Editor’s note: Condos share amenities, whereas attached housing units simply share a wall.
|Sold in 2023||181||40||47|
|Sold in 2022||264||50||73|
|Sold in 2021||325||60||88|
|Sold in 2020||252||42||51|
Looking more deeply at the 2023 sales, the table below includes pricing and DOM.
The jaw-dropping data point from the table above is, of course, the average sales price among detached homes. The median among these 181 homes was not much better, coming in at $755,000. For comparison, the homes selling in the same time period of 2020 featured an average price of $499,874 and a median price of $465,000. So far in 2023, there have only been 27 detached homes below the 2020 median, leaving 154 above that number.
Regarding days-on-market, the 2023 median provides a better sense of the pacing than the average, which is skewed by a handful of homes being on the market for more than three months. Among all sales, the average DOM was 21, whereas the median was 5. This means that the median home went from “coming soon” to “under contract” in less than a week. In fact, 170 of the closed sales involved seven or fewer days on market.
There has been no notable difference in DOM between condominiums (median of 6), attached homes (median of three), and detached homes (median of four). When removing new construction from the analysis (since they do not accrue DOM), 11 homes closed with zero DOM, which means they were purchased sight-unseen during “coming soon” status. Two of these were condominium homes and the remainder were detached.
This fast pace has been the norm here in southern Orange County in recent years. Again, even in 2020 during the early months of the pandemic, the median DOM was 5. One must go back to 2017 to find a median DOM statistic of more than a week – the median for the first five months of that year was 14.