Monday, December 29, 2008

Orange County Supply of Homes near 2 year low

This little nugget is reported in the OC Register. You won't hear this news from the mainstream media, but we've been reporting on this for several months. The supply of homes in the epicenter of the housing problem of Orange County in California is declining at a fast rate. Inventory peaked at nearly 18K homes September 2007 and has steadily dropped to below 12K now. Whats really interesting is that houses under $750K have a reasonably low turnover of only 5 months.

The critics would claim that houses are being held off the market due to the drastically lower prices, therefore, reducing inventories. In reality though, the lack of willing sellers at these levels combined with more buyers coming in at these low prices is what creates a bottom and a reversal in the market. The stats don't lie and they definitely show how inventory levels kept growing and peaked in the late summer when supply was too high, but in 2008 inventory peaked in March. Don't be surprised when CA real estate prices become steady in early 2009 leading to a housing recovery nationwide.

  • The latest O.C. home inventory report from Steve Thomas at Altera Real Estate in Aliso Viejo notes that the year ended — well, his last count, as of Thursday — with 11,842 homes listed for sale on the brokers’ MLS files, nearly a two-year low.
  • In 2008, inventory reached its peak by the end of March at 15,617 homes — just a 4.5% increase from where the year’s home supply started.
  • Compare that to 2007 when supply grew 54% from start of year to peak at 17,898 homes by September.
  • Or 2006, when inventory grew 117% from start of year to peak at 16,006 in August.
  • It would take 5.93 months for buyers to gobble up all homes for sale at the current pace vs. 5.34 months two weeks vs. 15.05 months a year ago vs. 7.51 two years ago.
  • Homes listed for under a million bucks have a market time of 5.00 months vs. 27.71 months for homes listed for more than $1 million.

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