Inside Edition: THE ORANGE COUNTY CHAPTER
John Burns Realty Housing Outlook:
Scot Wild
VP, John Burns Real Estate Consultant, So Cal Expert
The Stage Is Set For A Strong 2021 In Orange County At the outset of the COVID-19 pandemic, the Orange County housing market nearly ground to a halt. New home sales plummeted from more than 100 per week at the beginning of March to just 9 net sales in the last week of the month. With the economy in lockdown, Orange County had lost 260K jobs by April 2020. Some home builders walked away from land deals and cut staff as they prepared for a prolonged market downturn.
Near-Term Drivers Of The Orange County Housing Market
And then the housing market came roaring back. Many of the job losses proved to be temporary and concentrated on renter segments more than home buyers in Orange County. Weekly new home sales topped 100 again in September 2020. The new home community count dropped 21% year over year in Orange County as projects sold out faster than anticipated. Home builders are in fierce competition for land deals to refill their project pipelines.
All-time low supply in the resale market. Buyers are often frustrated as they attempt to navigate an intensely competitive resale market. 1.1 months of supply in the Orange County resale market represents a 42% decline over the last 12 months. As supply dwindles, homes often sell above their asking prices and buyers are becoming fatigued with the process. One of the strongest advantages new home builders can offer right now is the promise that “we have a home for you.”
Historically low rates are motivating current renters to buy their first home and mature buyer segments to lock a low rate on the homes they plan to retire in. New home communities targeting mature buyers could see a surge in sales as safety concerns related to the pandemic abate.
We recently described this as a high-risk and highreward portion of the housing cycle. In this article we will examine some trends that present opportunities and risks for the Orange County housing market in 2021.
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Southern California
BUILDER |
April 2021
