Multiple offers are back in the marketplace, but not for every house.
Today, we’re going to talk about what we’re seeing in the Southern California market. After, we will compare it to what top agents are experiencing around the world.
We’ll talk about two main things today.
Why are we seeing multiple offers in the market?
At the end of last year, there was a lot of uncertainty in the market, so buyers were waiting to see what would happen. After a few months of a steady market, buyers have come to the conclusion that this is the new normal.
What has caused the uncertainty?
News articles said we should expect a 20% decrease in 2023, but we’ve seen some reports walk back on that. On January 14th, a Goldman Sachs report came out predicting home values were going to depreciate 6%. 10 days later, they revised their report to a 2% depreciation instead of 6%.
If you do not work in real estate, it is easy to come to the conclusion that prices are going to come down since interest rates have doubled, but it seems like prices have already came down in the Orange County Housing Market.
Buyers are active in the market since realizing this is the new normal. The most recent housing report shows that prices have begun to rise again even though interest rates are flat.
Demand has spiked 38% over the past two weeks
As demand has spiked, inventory has actually decreased by 5%. We are still experiencing low inventory, sitting at 2,415 homes on the market in Orange County. About 1000 of those are overpriced and/or don’t look great, meaning that buyers are just not interested in those homes. Back on November 11th, we discussed how inventory in Orange County was not good enough for buyers and we are still experiencing that today.
What properties are receiving multiple offers?
We talk about this week after week, but homes that look good, are priced right, and are properly marketed are receiving multiple offers. We do need to clarify that multiple offers does not mean they are the same as two years ago. 50 people are not in line at an open house, nor are we receiving 35 offers the first weekend the house was listed. What we’re seeing right now is that the home might be listed for 30 days and receive 3 to 5 offers during that time. Buyers are realizing the home has been listed for three or four weeks and they can get into the home for a good price.
What properties are not receiving multiple offers?
Alternatively, if the house needs a little bit of work, the home needs to be priced appropriately to sell quickly. If the home is not priced appropriately, the seller should expect a longer time on the market.
For reference, time on market has dropped by 31% to 56 days as of this week. That is a good sign for sellers.
Comparing Southern California to the rest of the country
Southern California typically moves way before the rest of the market. We started seeing multiple offers a few weeks ago, and now it has really taken off across the country. Alternatively, there are some markets across the country ($300,000 price point) that never really slowed down. There are also some markets that came to a halt.
Orange County is a desirable place to live
In Orange County, prices are holding firm because it is one of the most desirable places in the country to live, if not the world. That is a huge factor in preserving our home values through whatever the rest of this shift looks like.
In conclusion, things are pointing towards a lot more activity in the Orange County market. A lot more buyers are coming to realize that this is the new pricing.
We would be happy to go through what our buyers are doing to be successful in this market, take advantage of the pricing, and be prepared for when rates inevitably do come down. Download our free buyer’s consultation to get a peek into how we educate our buyers.