Inventory is Still the Story
June 23, 2010
There’s no getting around it…the Orange County real estate market is a slave to basic economics.
Supply and demand, the basic principle we all earned in Econ 101, still applies in the real world. Right now, using Dana Point as an example, and the “Big Four” neighborhoods as a snapshot, you’ll notice that there are twelve (12) homes in escrow, but only seven (7) available for sale. That’s low inventory.
Now, with uncertainties in the market (war, BP oil spill, foreclosures), one could argue that demand is also low, or in balance with supply. From an agent’s perspective, we can tell you that those seven available listings are NOT enough of a selection for the buyers we are working with currently, who are looking for a single level home in one of these same four neighborhoods in Dana Point. Low inventory again – and this same condition exists in most other coastal cities in Orange County.
Buyers: is this summer a good time to buy? Yes, interest rates are phenomenally low….under 5%! Prices are also way, way down from their 2005 peaks – in some cases, home prices in Dana Point and South Orange County are down 30-40% from their previous highs. Low prices, and low interest rates.
Sellers: does this mean that now is a bad time to sell? Not necessarily. Remember, if you are planning to buy down, buy laterally, or buy up, there really isn’t a bad time to sell since you are also buying simultaneously. For most families, a sell-and-buy event can be thought of as simply moving one’s mortgage from one house to another (don’t forget the closing costs, though).
Want more insight? We’re out there “in the trenches” every day! Call us at (949) 240-5892, or contact us via email.
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