The Orange County housing market has been on an upward trend in recent years, but what can we expect in Q4 2022? This update will provide an in-depth look at current market conditions, including trends in home prices, sales, and inventory, as well as an analysis of median sales price, median days on market, number of home sales, and interest rates in comparison to previous quarters and years.
Additionally, we will discuss the key drivers of the market, such as low inventory and the impact of the COVID-19 pandemic, and provide an outlook for the future direction of the Orange County housing market in 2023.
Over the past few years, the Orange County housing market has been characterized by low inventory, which has led to an increase in home prices and a decrease in the number of homes available for purchase. The median sales price of homes in Orange County has shown a steady increase reaching an all-time high in Q2 2022. However, prices have shown a decreasing trend in Q3 and Q4.
Compared to other quarters, Q4 saw a decrease in prices, with fewer people buying homes over this period. The number of home sales has decreased slightly due in part to the limited number of homes available for purchase.
The COVID-19 pandemic has also had an impact on the market, with many potential buyers and sellers delaying their plans due to economic uncertainty. Due to these and many more challenges, home prices have continued to slow down in the last two quarters while interest rates continue to increase.
Median Sales Price
The median sales price of homes in Orange County in Q4 2022 was $885,000, a slight decrease from previous quarters. From Q1 to Q2, the median sales price rose from $1,035,000 to $1,086,000 which is a 4.7 percent increase. The prices started to go down in Q3, with the median sales price at $949,900 and later settling at $885,000 in Q4, the lowest price for this year.
As for Q4 2021, the median sales price was $990,000, which means the Q4 2022 price has gone below what it was last year. Despite the downward trend in median sale price in Q4 2022, the prices are above what they used to be in the past two years.
Factors contributing to a decrease in medium sales price include rising inventory levels and lower demand from buyers. Additionally, the ongoing trend of high interest rates is making it hard for buyers to purchase higher-priced homes.
Median Days on Market
The median days on market for homes in Orange County in Q4 2022 was 23 days, indicating that homes are taking longer to sell. Homes were selling faster in Q1 and Q2, with a median days on market of eight days. In Q3, the median days taken to sell a home doubled from eight days in previous quarters to 16 days. The trend continued in Q4, with homes selling in 23 days which is higher than any of the previous quarters.
The main factors impacting the median days on market include low level of competition among buyers and the unavailability of homes for purchase.
Number of Home Sales
In Q4 2022, the number of home sales in Orange County was 4,234, a slight decrease from Q3 2022, which had 5,483 home sales. From Q1 to Q2 of the same year, we saw a 19 percent increase in home sales from 4,957 to 6,113.
Compared to Q4 2021, which had 6,109 home sales, Q4 2022 has had a 30.7 percent decrease in the number of home sales. Even though there is a limited number of homes available for purchase in Q4, competition for homes from buyers is low. This is because most buyers are priced out of the market by rising interest rates.
Interest rates in Q4 2022 have increased, with the average rate for a 30-year fixed mortgage hovering around 6.26 percent at the time of this writing. 15-year fixed mortgage rates are currently at 5.46 percent, while a 5-year ARM rate is 6.24 percent.
Factors influencing interest rates include economic conditions and government policies. Low interest rates make it more affordable for buyers to purchase homes, which can contribute to high demand for homes. Q4 2022 of Orange County housing market has seen a sharp increase in interest rates and this has led to reduced demand for homes in Orange County .
The outlook for the Orange County housing market in 2023 is cautious yet hopeful. With reduced home prices, fewer home sales, and low inventory, we’ll all be looking to the general economy and the curbing of inflation to see what the market does this year.
The Orange County housing market in Q4 2022 is expected to continue its trend towards balance. Though buyer demand is reduced and home prices have gone down in the last two quarters, they are still above pre-pandemic levels.
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