Is it a Sellers’ or Buyers’ Market?
With sales sliding -30.6% in Orange County from December to January, many are wondering if now is a good time to buy or sell.
Granted, interest rates are bouncing between high 3s and low 4s, so there definitely an incentive to get into the market. But is it a buyers’ or sellers’ market?
Here are a few events that will provide some insight:
California homes that sold in January, sold for an average of 11% below asking price— down just a little from the 13% below asking price that we saw in December. This is in line with the fact that the number of homes where sellers reduced the listing price has risen 31% from January 2014. It’s a strong signal that sellers’ expectations are not aligned with buyers’ expectations.
The number of properties that received multiple offers in January fell six percentage points to just 58% of sales—down from 64% during the previous year. The amount of homes in January that sold above asking price dropped to just 16%. This is way off the 40% high we experienced last March.
The average time unsold inventory stayed on the market in San Diego remained unchanged at 35 days in both January 2014 as well as in January 2015. However, California as a whole experienced an increase in unsold inventory during this timeframe from 4.3 months to 5 months on the market. Orange County increased from 62 days in January 2014 to 72 days in January 2015.
When you factor in an increase in the number of houses that are selling below asking price, not as many sellers receiving multiple offers, and only a small percentage of properties selling above listing price, we can determine that these signals indicate we are in a low-competitive buyers’ market.