By learning more on the local Orange County real estate marketplace, both buyers and sellers can make more effective property transaction decisions in the coming year. At Stanfield Real Estate we follow the trends within the local real estate marketplace carefully, and can use the actionable data available to help provide some guidance for those without market experience. Let’s delve into the details as we put the 2017 Orange County real estate market into clear focus.
ANNUAL SALES VOLUME MOVING TOWARD PEAK IN 2019
The data indicates that the peak annual number of home sales in Orange County of 46,000 is set to be reached by 2019 to 2021. The key performance indicator of note is the local employment figures. Only when labor force participation and job levels normalize will home sales volumes begin to move back toward the high levels seen in 2003 (54,000) and the boom of the early 2000s.
PRICES ON THE RISE
According to CoreLogic, year-over-year prices in the Orange County real estate marketplace have risen for 54 straight months. Prices rose, on average, an astounding 50% from May 2012 to May 2016. The average price rise has been driven mainly by the value of new homes in Orange County. With more jobs in the area, higher incomes, and more buyers looking for housing, experts expect the pace of price rises to continue throughout 2017.
INTEREST RATES A LEADING FACTOR
The historically low 3.5% interest rates across the country could not last forever. And the signs are that interest rates are set to rise even further in the near future. The recent rise to 4% interest from 3.5% means that buyers paying today for a home in Orange County will be paying $161 more per month for a median-value detached home in the area. And over a year, that will add $1932 to the average homeowner’s housing costs.
A TRUMP PRESIDENCY
A rise to 4% interest rates after Trump was announced the new President of the United States in November 2016 help boost the economy toward the end of the year. And many experts now believe rates are likely to rise further this year to 4.5% and perhaps 5% in 2018. What a Trump presidency will bring to the Orange County marketplace, and the real estate markets of other cities throughout the country, is unpredictability. And it’s difficult for even those with years of market experience to analyze the potential for changes as directed by the new President. A trade war with China could impact housing prices negatively for years to come, while expected infrastructure spending could bring jobs to the area and provide a solid foundation to property values.
HOUSING INVENTORY CAN DICTATE BUYING TIMELINES
One important indicator for buyers in the Orange County marketplace will be the housing inventory. The inventory has been depleted in recent years as new buyers come in en masse and turnover is rapid. The inventory level on January 1, 2017 was 4,700 homes. A sustainable inventory for the marketplace will be close to 8,000 homes, which was last achieved six years ago in 2011. However, buyers are can still find that ideal property in the coming year when they partner with a leading market advisor. Availability remains steady but guidance is needed to help ensure an effective purchase decision.
It’s set to be another strong year for the Orange County real estate marketplace as we move into 2017! To discover more on the latest local housing trends or simply speak with an expert about your home buying or selling requirements, call us today at 949.392.5600.