The Orange County housing market surged again in the second quarter of 2016, with sales spiking over 35% from last year. But pricing was more mixed, as Orange struggles to find its footing after years of bouncing around the bottom set after the 2008‑09 correction.
Sales. Orange single‑family sales were up yet again, rising over 35% from last year and now up almost 30% for the rolling year. This continues a trend we’ve been watching for over four years, with Orange sales now up seven quarters in a row and 16 out of the last 17. Indeed, we are now seeing sales at historically high levels, with the 3,239 single‑family closings marking the highest twelve‑month total since 2007, at the tail end of the last seller’s market.
Prices. Orange homeowners have reason to be hopeful about home prices for the first time in years. The quarterly pricing was mixed, with the average down 5% but the median up 5%, an unusual spread between the average and median. But what was remarkable was that for the rolling year, Orange prices were up across the board: rising 0.1% on average, 2.3% at the median, and 0.8% in the price‑per‑square foot. That may not seem like much, but it marked the first time that Orange prices have gone up in all three metrics in almost ten years.
Negotiability. The negotiability indicators also give homeowners reason to feel like sustainable price appreciation is coming, with fewer actively listed homes selling more quickly and for closer to the asking price. Inventory was down almost 40% from last year, below 9.0 months for the first time in over 12 years. Similarly, the days‑on‑market fell again, dropping almost 8%. And the last listed price retention rate was up again, rising to 96% for the first time since 2007.
Condominiums. The condo market continued to struggle. Sales were up slightly, but we continue to see prices falling. As we’ve noted before, the problem with Orange condos is that they’re priced too close to single‑family homes. If we continue to see meaningful appreciation in single‑family prices, that will arrest the slide in condo prices.
Going forward, we believe that Orange is poised for its first sustainable green shoots of price appreciation in almost ten years. With demand strong, prices low, interest rates down, and the economy generally improving, we expect that the market will have its best year in a decade.