Earlier this week we finished our mid-month micro West OC specific real estate update. In the four markets we track – Seal Beach, Leisure World, Rossmoor, and Los Alamitos – all markets showed signs of either stability or market strength. Likewise, in this exclusive macro countywide real estate report, all of the stats point clearly at market strength.
The exclusive residential real estate reporting OC180NEWS readers get is a combination of twice monthly micro reports on the four West Orange County communities, plus a macro countywide review of key stats every two weeks. In the mid-month micro reports we focus on the number of properties on the market, the listing prices, and the number of foreclosure properties in the four communities.
In addition to our detail review of West OC foreclosure properties at mid-month, we also track the total number of distressed active listings countywide in our biweekly macro reports. Our basic view is that the greater number of distressed properties, either on the market, or in the off market shadow inventory, the worse it is for the Orange County real estate market. Conversely, the fewer distressed properties, the better for the local real estate market.
For three of the four West Orange County communities, the number of distressed properties either improved or was stable as of mid-February. The one exception, Los Alamitos, edged up from 16 distressed homes to 17 units — a small enough increase to be negligible.
The total number of distressed homes in Seal Beach decreased from 36 to 27, and Rossmoor dropped from 27 to 26 distressed houses. There have been no distressed units in Leisure World for ages. Thus, the West OC distressed report as of mid-February is either stable or positive.
The same improving trends for distressed properties on the market are playing out for Orange County in total. At OC180NEWS we have been tracking the number of distressed properties on the market in OC for more than four years and it has almost never been better.
Four years ago, 2/19/2009, there were a total of 4,883 distressed homes actively on the market in OC. During 2009, that number fell to a recent low of 2,346 on 10/1/2009. From that low point, the number of distressed listings steadily increased to 4,123 on January 6, 2011.
As of February 16, 2012, the most recent data, the number of distressed properties on the market in Orange County decreased to 2,527 units. This is the lowest level of distressed homes on the market since the end of 2009. Continuing a trend which began back in January 2011, OC distressed homes fell by 164 units, or 6% in just two weeks.
In addition to our long term tracking of distressed listings, we also watch the real estate supply and demand numbers for all of Orange County. Unlike the distressed listings, the supply/demand numbers are directly affected by the annual home buying cycle. Thus, these numbers must be reviewed in their historical context.
Simply stated, all of the current supply/demand numbers we track at OC180NEWS more strongly reflect market strength than at any time since 2008. Current data surpassed one year ago several months back, but two years ago was still better. Now, the most recent numbers are better than even that benchmark – and not just a little better.
For the late February report, comparing the raw numbers for 2012 to 2011, 2010, and 2009: The number of homes on the market is at the lowest level; demand is the highest; market time is the lowest; and the ratio of distressed listings to demand is at the lowest level.
Further, comparing the trends as of the late February 2012 report with the three previous years: Supply is decreasing while in all previous years it was increasing, and demand increased at nearly double the previous high.
There were 7,597 homes on the market in Orange County as of February 16, 2012, down 226 units or 2.9% from two weeks earlier. At the same time in the previous years, the inventory of homes on the market was increasing. One year ago there were 10,678 homes for sale in OC. Two years ago, the inventory was at 8,135, and in 2009 there were 11,541 houses available in OC.
Meanwhile, as the number of homes on the market was decreasing, demand, measured by the number of new pending sales during the last 30 days, increased to 3,569 units as of February 16, 2012. That’s an increase of 435 units, or 13.9% in just two weeks. One year ago, demand was 2,923, up by 7.5%.
Demand in late February 2010 was 3,244 homes. This is the first time demand in 2012 has surpassed the demand of 2010. Further, at this time in 2010, demand was flat, rather than increasing as it did this year. At this time in 2009, demand was 2,819 units, up 5.5% from the previous two weeks.
Another important measurement related to real estate supply and demand is the ratio between the two. This ratio illustrates the average number of homes an average buyer has to choose from. The higher the number, the more like a buyers market, and the lower the number, the more favorable the market is for homeowners. For late February 2012, the supply/demand ratio was 2.13 units offered for every sale.
The supply/demand ratio one year ago was 3.65 and in 2010, it was 2.51. Just like total demand, this is the first time the supply/demand ratio has been more favorable for homeowners than at the same time in 2010. In 2009, the ratio of houses for sale/demand was 4.09.
Finally, the relationship of demand to distressed units on the market is another way to look at the data. This percentage reports the portion of current demand needed to use up all the distressed units on the market. Market conditions are negative when there are more distressed units than there are sales. This condition is represented by a percentage of greater than 100%.
At the beginning of 2011 demand was at a low point of 1,960 units. At the same time, there were 4,123 distressed units on the market, 210% of demand.
Throughout 2011 and into early 2012, this relationship improved, but not until the beginning of February 2012 did it fall below 100%. On February 2, 2012, distressed listed properties were 86% of demand. With demand surging and distressed properties falling, As of February 16, it decreased to 71%. That’s the current state of Orange County real estate. Stay tuned to OC180NEWS to see if these trends continue into the heart of the home buying season.
Real estate is very local and any buying or selling decisions should be based on circumstances of specific neighborhoods. This article series is intended to provide information about macro countywide real estate trends in supply and demand.
All real estate data in this article is from a report provided by ReportsOnHousing.com. The analysis and text are by OC180NEWS.
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About Dolores Barr, Publisher
Dolores Barr has lived in Rossmoor since 1992 and has created this site to provide local news for the people of Los Alamitos, Seal Beach, Rossmoor, Leisure World, Sunset Beach, and Surfside, California. My husband and I have had two students graduate from the Los Alamitos Unified School District and currently our Grandson, Ricky Apodaca, grade 3 at Weaver Elementary, is actively involved in youth baseball through LAYB and youth football through FNL.
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