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Note: You can find the charts/graphs for the Local Lowdown at the end of this section.
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In Orange County, the housing market is always experiencing high demand, especially in the spring and summer months. The median single-family home price rose 15.6% year to date, while condo prices were up 11.6%, both landing at the third highest price level on record. Single-family home prices and condos are only 2.2% and 2.7% below the record highs, respectively. Although prices typically peak in May or June, 2023 is not a typical year. Prices could easily inch higher in August even if demand softens.
Typically, demand begins to decline this time of year, so the consistently low supply may become less of an issue. However, less of an issue doesn’t mean a non-issue. Quality new listings will certainly be sold quickly, while less desirable homes will sit on the market. This isn’t unusual, but it’s more apparent due to current mortgage rates. Potential homebuyers aren’t nearly as willing to pay a premium for a fixer upper as they were in 2020 and 2021.
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Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). MSI fell significantly this year, indicating the market moved from a balanced market to a sellers’ market in the first quarter. MSI remained low in the second quarter for both single-family homes and condos, falling further still in July. The sharp drop in MSI occurred due to the higher proportion of sales relative to active listings and less time on the market.
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