The Orange County housing market surged again in the third quarter of 2017, with both sales and prices up while inventory continued to fall.
Sales. Orange sales were up yet again, rising over 6% from last year’s third quarter. Quarterly transactions have now gone up in 12 straight quarters and 21 out of the last 22. Indeed, for the rolling year, sales were up almost 10%, and the 3,722 single‑family sales were the highest total we have seen since the height of the last seller’s market.
Prices. These sustained levels of buyer demand are finally having a meaningful impact on pricing. Home prices rose again in the third quarter, up a tick on average and almost 5% at the median (although down slightly 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 almost 4% on average, over 5% at the median, and almost 2% in the price‑per‑square foot.
Negotiability. The available inventory continues to tighten, down over 22% and now down to the six‑month level that starts to signal 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. Homes are now selling in almost five months from listing to closing.
Condominiums. The condo market was also up sharply, continuing a welcome trend that we finally started to see this year. Sales were up almost 15%, and prices were up over 1% on average and almost 7% at the median. The rolling year pricing showed that this is now a longer‑term trend: up 4% on average, over 5% at the median, and over 3% in the price‑per‑square foot.
Going forward, we believe that the Orange County housing market is poised for a great year: 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 and into 2018.