What Do These Numbers Mean for the Housing Market? | May 2023 San Clemente Housing Market Update
A topic that I still hear swirling around is the impending housing market crash. Is a crash imminent? Are home values going to drop? I encourage you to look at the actual statistics on what is happening in the housing market before you make any definitive conclusions.
Demand is the number of houses currently in escrow compared to last month's pending escrows. That ratio in Orange County is pretty much the same as April with roughly 1,660 homes currently in escrow.
What does that mean and why does it matter? This time last year, demand was 30% higher and if you look at the three-year average from 2017 to 2019, demand was 67% higher than it is today. We are seeing suppressed demand because of increased mortgage rates and the lack of inventory, ultimately making it difficult for buyers to get into escrow.
2. Active Inventory
There are 94 active and coming soon listings in San Clemente as of May 23rd, 2023, which is about 10% more than last month. There have also been 15 new listings put on the market in the last seven days with five listings falling out of escrow and available again.
3. Price Reductions
There have been three price reductions in the last week in San Clemente. The average of the first two price reductions is $75,000, and the third was a $2 million price reduction on a $10m+ listing in Cotton Point Estates next to Nixon's former Western White House.
4. Mortgage Rates
Interest rates continue to fluctuate. Currently, my lender is quoting 6.375% for both non-conforming and conforming 30-year fixed-rate loans.
5. Closed Sales
In March, there were 48 closed sales. In April, another 42, and in May (as of May 23rd) there were 38 closed sales.
6. Expected Market Time
This is how long it takes to sell a home in today's market or the number of days it takes for a listing to go from active to pending. For homes priced between $1m and $2m, the average time to sell is 36 days resembling a hot seller's market. For homes priced between $2m and $4m, the average time to sell is 81 days which is considered a slight seller's market.
7. Selling Season
We are in the spring housing market, however, the number of homes that are for sale does not truly resemble a traditional spring market. We have been waiting to see if there are going to be more homes coming on the market as we are still hovering at very low inventory levels which has fueled bidding wars and some record-high prices.
If you have any specific questions on the San Clemente housing market or you are gearing up to get your property ready to sell, shoot me a text message at (949) 620-6206. If you are a buyer who is preparing to purchase, let's get everything in order so that we can put you in the best position to compete and get you that perfect house.