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Real Estate - Market Time Report for Oct 5th


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  • Real Estate - Market Time Report for Oct 5th

    Sorry it took me a while to get this posted! Here's the latest Market Time Report:
    Market Time Report: PRICE, PRICE, PRICE

    October 5, 2006

    Good Morning!

    Pumpkins on doorsteps are a sign that the slower Holiday market from Halloween to mid-January is upon us. The Orange County market time has grown substantially over the past two weeks, rising from 7.1 months to 7.78 months today. The current active inventory dropped by 190 homes in two weeks to 15,482 today. The number of homes placed into escrow within the prior 30 days, demand, dropped in two weeks by 217 homes to 1,991. The drop in the active inventory appears to be similar to the drop in demand; HOWEVER, the drop in inventory represents a 1.3% drop, versus a 10% drop in demand. Attached homes have slowed at a more accelerated rate. The market time for detached homes, 7.39 months, represents a 7.7% increase in just two weeks, versus a 9.6% increase to 8.18 months for attached homes. It is important to remember that homes above the six month mark are considered a slight buyers market and above the nine month mark are considered a deep buyers market with much greater pressure on prices. Only detached homes below $750,000 are not experiencing some sort of a buyers market. More homes must come off the market to compensate for the cyclical drop in demand during the Fall and Holiday markets. Otherwise, market time will rise and the pressure on prices will increase further. 33.5% of all attached homes currently on the market are vacant compared to 24.8% of all detached homes. Overall, 28.3% of all homes, or 4,375 homes, on the market in Orange County are vacant.

    Since the beginning of this year, the inventory has climbed by 8,329 homes. Yet, demand, the number of homes placed into escrow within the prior 30 days, is only 184 additional homes today compared to January 1st. Market time was as 4.03 months compared to almost eight months today. Last year at this time, there were only 7,871 homes on the market, 7,611 fewer than today, and 2,868 homes placed into escrow within the prior 30 days, 877 more than today. The inventory was at a 2.74 month supply. The market time was steadily growing. The growth spurt started in August and persisted for 22 straight weeks, ending in the third week of January 2006. The next growth spurt in market time started at the end of February and lasted 20 consecutive weeks, ending at the very end of July. The market time dropped further in August, leveled off in September and then we started October with a giant spike in market time.

    I am still very surprised in the number of sellers who have remained on the market. If demand continues at the current snapshot of escrow activity within the prior 30 days, 1,991 homes (which will most likely drop), that means 13,491 sellers will not successfully sell their homes over the next month. The market just is not going to get any better for the remainder of the year. If sellers are not willing to do what it takes to get their homes sold, then they should pull their homes off the market and enjoy the colors of Fall and all of the distractions of the holidays. For sellers, MOTIVATION

    What can we expect for the rest of the year?

    How should a seller approach the market?below the most recent comparable sale.

    How should a Buyer approach the market?their HOME. If buyers approach the purchase of their home as long term investmentsbest

    The following areas have inventories of less than six months: Cypress, Fountain Valley, Lake Forest and Placentia.

    The following areas have inventories between nine and ten months: Canyon Areas, Ladera Ranch, Laguna Niguel, Rancho Santa Margarita and homes between $750,000 and $1.5 million.

    The following areas have inventories greater than ten months: Corona Del Mar, Coto de Caza, Dana Point, Dove Canyon, Foothill Ranch, Laguna Beach, Laguna Woods, Newport Beach, Newport Coast, San Clemente, Talega, Villa Park and all ranges above $1.5 million.

    Have a fantastic weekend.

    Unusually and exceedingly peculiar and altogether quite impossible to describe...

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