The Orange County housing market surged again in the second quarter of 2017, with both sales and prices up sharply while inventory continued to fall.
Sales. Orange sales were up yet again, rising over 6% from last year’s second quarter. Quarterly transactions have now gone up in 11 straight quarters and 20 out of the last 21. Indeed, for the rolling year, sales were up almost 13%, and the 3,655 single-family sales were the highest total we have seen since the second quarter of 2006 — at the height of the last seller’s market.
Prices. These sustained levels of buyer demand are finally having their expected impact on pricing. Home prices surged again in the second quarter, rising 9% on average, almost 7% at the median, and over 5% in the price-per-square foot. And home prices are now showing meaningful signs of appreciation over the longer-term, with the rolling year prices up over 5% on average, 4% at the median, and 3% in the price-per-square foot.
Negotiability. The available inventory continues to tighten, with the months of inventory falling almost 25% and now down close to the six-month level that usually indicates a seller’s market. Meanwhile, homes are selling more quickly and for closer to the asking price, with the days-on-market falling and the listing retention rate rising.
Condominiums. The condo market was also up sharply, continuing a welcome trend that we finally saw in the first quarter. Sales were up almost 27%, and prices were up sharply. We wouldn’t read too much into the eye-popping quarterly results, but even the rolling year totals were impressive: up 4% on average, over 2% at the median, and over 4% in the price-per-square foot.
Going forward, we believe that the Orange County housing market is poised for a strong summer. The fundamentals are tremendous: demand is high, prices are still at attractive 2003-04 levels, interest rates are at historic lows, and the economy is generally strong. With inventory continuing to decline, we expect to see meaningful price appreciation through the rest of 2017.