The real estate market of Orange County has continued to see rising growth through quarter two of 2021. Much of this growth has been attributed to the effects of the economic recovery from the economic stall of the COVID-19 pandemic.
Orange County and other Californian jurisdictions have been subject to a state-wide moratorium on foreclosure and evictions since the beginning of the pandemic. Additionally, current rising prices are largely attributed to an imbalance in supply and demand for housing in Orange County.
In the short term at least, real estate market growth in Orange County seems to show no signs of slowing down any time soon, as seen through the three market indicators discussed below.
Median Closing Price
Prices have continued to rise through the second quarter of 2021, reaching a median closing price of $748,800. Prices have risen 15% compared to last quarter, when the average closing price of houses in the county was only $649,000. The rise in housing prices over the last year is even more staggering when compared to Q2 of 2020, when the average closing price of housing was only $435,000.
This extreme increase in housing prices during the pandemic in Orange County is largely due to an imbalance of consumers wanting to purchase housing in the county compared to homeowners wanting to sell. With the economic and financial uncertainty imposed on the nation during the pandemic, very few homeowners are keen on a financial shakeup by selling their homes, while many individuals are seeking more affordable housing such as what is found in Orange County.
Rising demand for housing in Orange County combined with limited supply has led to demand-side inflation, causing prices to skyrocket through bidding wars and competition.
Number of Houses Sold and Listed
As housing prices rise, it is inevitable that more homeowners will want to sell their homes to take advantage of higher property values, resulting in an increase in the number of houses listed and sold. In the last few months, the number of houses listed and sold has indeed gone up, with 15,098 houses listed and 14,212 houses sold during Q2 of 2021.
Compared to last quarter when only 11,446 houses were sold and 14,530 houses were listed, housing sales have increased by 19.5% and house listings have increased by 4%. Housing sales have increased significantly more than houses listed, signaling that consumer demand continues to outstrip supply in the county, explaining the extreme rise of prices for houses in the area.
House listings may only be so tempered, however, due to a foreclosure moratorium imposed on Orange County and other jurisdictions by the California State Legislature during the COVID-19 pandemic. Once the moratorium expires, Orange County is expected to see an influx of house listings from foreclosed properties.
Median Days on Market
Over the course of Q2 2021, houses have consistently sold faster upon listing on the market compared to previous months. During Q2, the median days to sell for houses after the listing was 7 days, down 57% from the median days on market during Q1 2021, and an astounding 157% down from the 19 median days on market back in Q2 of 2020.
This drastic decrease in the time houses spend listed on the market is another sign that demand for properties in Orange County continues to grow, further outstripping supply as we head into Q3 2021. This should mean that, in the short term at least, housing prices should be expected to continue rising.
Analysis of Statistics
With rising prices and lower median days on the market for houses in Orange County during 2021, it’s safe to say that demand for property in the county is currently high and should be expected to continue rising as home buyers continue to shift towards more affordable areas during the aftermath of the pandemic. Additionally, the rate at which housing prices are rising in Orange County is fast enough to potentially attract the attention of real estate investors and prospectors, who may further drive demand and prices of property in the area upwards.
The real estate market of Orange County has continued to see rising growth through quarter two of 2021. Much of this growth has been attributed to the effects of the economic recovery from the economic stall of the COVID-19 pandemic.
Orange County and other Californian jurisdictions have been subject to a state-wide moratorium on foreclosure and evictions since the beginning of the pandemic. Additionally, current rising prices are largely attributed to an imbalance in supply and demand for housing in Orange County.
In the short term at least, real estate market growth in Orange County seems to show no signs of slowing down any time soon, as seen through the three market indicators discussed below.
Conclusion
Potential buyers should understand the risk that the housing bubble in Orange County may pop in the next few years, resulting in lowering prices and potentially a loss of investment. However, indicators in the short term suggest that housing prices for Orange County should continue to rise at a great rate in the meantime, with no sign of the housing market cooling off any time soon.
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