As the school year comes to a close and graduation caps soar through the air, the housing market enters a new phase known as the Summer Market. While summer is traditionally associated with relaxation and outdoor activities, the real estate market experiences a slight evolution and slowdown. In this blog post, we will explore the characteristics of the Summer Market in Orange County, discussing its timing, changes in demand and supply, and the implications for buyers and sellers.
The Timing of the Summer Market: While the official start of summer falls on June 21st, the housing market in Orange County aligns with the end of the school year, typically around the end of May. This timing allows families with children to search for and close on homes during the summer break. However, this period is marked by various summer activities, making it challenging for individuals to focus on housing amidst vacations, outdoor adventures, and children’s camps.
Demand and Supply in the Summer Market: The Spring Market, which spans from mid-March to the end of May, is known as the peak season for housing demand. As families shift their attention to summer activities, demand experiences a slight decline during the Summer Market. While buyers may still perceive the market as busy, statistical data reveals a drop in demand. Concurrently, the supply of available homes increases as more properties are listed for sale. This rise in inventory contributes to an extended Expected Market Time, the duration from listing to escrow, and ultimately slows down the overall pace of the market.
Analyzing Past Trends: Examining the 5-year average from 2015 to 2019, before the COVID-19 pandemic impacted the data, we observe a 7% drop in demand and a 9% increase in the supply of homes from the end of May to mid-August in Orange County. This decrease in demand translated to 192 fewer pending sales, while the supply increased by 557 homes. Based on these averages, we can expect demand to decline from 1,665 pending sales at the end of May to 1,553 by mid-August, while the supply of available homes is projected to rise from 2,190 to 2,382. Consequently, the Expected Market Time is estimated to increase from 39 to 46 days, signifying a 17% rise.
Implications for Buyers and Sellers: While buyers may perceive a potential advantage due to the slowdown in the market, negotiations will continue to favor sellers during the Summer Market. Although the pace of the market may not be as rapid as in previous months, homes will still receive significant attention, multiple offers, and sales prices exceeding their listing prices. However, the market transformation will be characterized by fewer showings, slightly fewer offers generated, and a decrease in the number of sales above the list price.
As the Summer Market emerges in Orange County, the housing market experiences a seasonal shift. Buyers and sellers will notice a slight slowdown, but it’s important to recognize that the market still favors sellers. The Summer Market provides an opportunity for families to enjoy the warmth and activities of summer while navigating their housing goals. By understanding the dynamics of the Summer Market, buyers and sellers can make informed decisions and navigate the evolving real estate landscape with confidence.
If you have questions about today’s real estate market, reach out to us directly. We are always here to help.
Courtesy Steven Thomas
