How Low Can You Go? Putting The Squeeze On Southern California’s Luxury Housing Inventory
If you’re looking to buy a home in Orange County, you’re likely aware that each passing day in the market feels like a game of limbo. Housing inventory gets squeezed just a little more, no matter whether you’re on the coast or inland (though it’s especially true in Laguna Beach, where Cary Glenn and Main Beach realty both reside). If you’re in the market to sell your property, though, it’s anything but limbo. The numbers on almost everything just keep going up: housing prices, eager buyers, and so on. The only thing that’s staying low are mortgage rates, though the Fed plans to raise these rates soon to help ease some of the pressure on this constricted market.
From this perspective, early 2022 is the seller’s market. While home sales themselves in Southern California dropped by about 10% last year according to DQNews, this isn’t due to ebbing demand. Rather, it points toward a tightening housing inventory. In Orange County last December, the median price for a home rose by about 17.6% to a record $935,000. Meanwhile, actual sales fell 17.5%. Home improvement projects are still hot, too, and they’ll likely continue to flourish in time for the all-too-near spring housing market. And that’s before we consider how Americans have been saving money to buy new homes over the past year — nearly $1.6 trillion nationally, according to the Wall Street Journal.
But it would be wise to temper expectations if you’re selling your home. While more and more Americans are ready to begin spending their savings on milestone projects like houses, inflation rates of 3% have also made them a bit apprehensive. At the same time, the threat of rising inflation also puts some pressure on buyers; if inflation continues, their dollars will be worth less and less over time. There’s a clear risk in hoarding more money to time the market just right, and some buyers may be willing to take a small hit now to prevent a larger hit later on. So here’s the takeaway: homebuyers are in a bit of a bind as the limbo bar of good housing bears down more and more. Sellers are in a prime position to offer those buyers the push they need to make an investment that will save or even earn them money down years down the line, though they also need to take advantage of this demand before the housing market really takes off in the Spring. Whether that means remodeling or just cleaning up their house before listing, there truly is no time like the present.
As an aside, Gov. Gavin Newsom does plan to devote $1.5 billion of 2022’s state budget to building affordable housing. Perhaps this will ease up some pressure on low-to-middle income earners buying their first home, as well.
Looking to sell your home on the Orange County housing market? Contact Cary Glenn at Main Beach Realty in Laguna Beach, CA. With 20 years of experience buying, selling, and refurbishing luxury real estate in and around Laguna Beach, Cary Glenn will work closely with you to help you find a solution that works best for you.
