Realty Blog

A low inventory peak means a hot seller’s market for quite some time

Cheryl Lynch shares her thoughts on the Active Inventory Peak of Orange County real estate:

The active inventory has been low for years, but this year it has been exceptionally low. The Orange County housing market has been frustrating buyers for years now and 2017 has proved to be especially frustrating. With 7% fewer FOR SALE signs this year compared to last year, there just have not been enough homes to satiate the voracious appetite of buyers. As a result of low inventory and off-the-chart demand, Orange County homes have appreciated non-stop since 2012. In the past year alone (July ’17 over July ’16), the median sales price has risen by 5.5%, and since 2012 has risen by 80%.

Even with a rising median sales price, the historically low interest rate environment is keeping homes affordable. And, interest rates are projected to remain low for the rest of the year and into 2018 as well. An anemic inventory is only going to fuel future appreciation. Buyers will continue to compete with limited choices and multiple offers will persist, especially in the lower ranges, homes priced below $750,000. The inventory will remain low for quite some time because the active listing inventory peaked about a month ago, not quite reaching the 6,000 home mark. For perspective, the active inventory needs to remain above 8,000 homes for quite some time in order for the housing market to move from a seller’s market to a balanced market, one that does not favor a buyer or seller. Continue reading here.

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Consumers grow more confident in future of economy

Source: Housing Wire

Consumers’ assessment of their current conditions remained at a 16-year high even as their confidence in the future edged higher, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch.

The Consumer Confidence Index increased to 121.1 in July up from 117.3 in June. The Present Situation Index increased from 143.9 last month to 147.8 in July and the Expectations Index increased to 103.3, up from 99.6 last month.

In 1985, the index was set to 100, representing the index’s benchmark. This value is adjusted monthly based on results of a household survey of consumers’ opinions on current conditions and future economic expectations. Opinions on current conditions make up 40 percent of the index, while expectations of future conditions make up 60 percent.

Consumers’ assessment of their current conditions improved in July as those saying business conditions are good increased from 30.6 percent to 33.3 percent. Those who said business conditions are bad remained unchanged at 13.5 percent. Consumers also held a more favorable view of the labor market, as those saying jobs are plentiful increased from 32 percent to 34.1 percent while those saying jobs are hard to get decreased from 18.4 percent to 18 percent.

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Consumers vote for housing as top investment

Source: Bankrate.com

Consumers voted for real estate as their top long-term investment choice for a third year in a row, according to the latest Bankrate.com survey. No-risk cash investments came in second, and stocks came in third.

Broken out by age group, younger adults divided their vote for the soundest long-term investments between real estate and cash at 30 percent each. Stocks trailed at 13 percent, behind gold. “Contrary to the notion that millennials don’t want to buy homes, their preference for real estate as a long-term investment is exceeded only by their counterparts in Gen X,” says Greg McBride, Bankrate’s chief financial analyst.

Young adults split their vote evenly between real estate and cash (at 30 percent for each), with stocks trailing far behind (at 13 percent, behind gold). Compare that to baby boomers, who choose stocks second after real estate, with cash third.

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📲 Questions?
📲 Buying or selling a home?

Give your Winning Team a call at (949) 842-5340 | See what your home could sell for in 30 seconds, visit thelynchgroupoc.smarthomeprice.com

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