Without exception, the Orange County housing market slows down every summer. With less than a month left in the spring market, the best time of year to sell is about to end!
If you were hoping to take advantage of the busiest selling season in the OC you better act fast. For homeowners who want to take advantage of the strongest buyer demand of the year, they better be on the market now and priced to sell now. (psst! I can make it happen for you quick!)
For sellers who truly want/need to sell, now is not the time to stretch the asking price. It’s hard not to get excited and overly aggressive with asking price in a hot sellers market. Just because its a hot market doesn’t mean buyers are willing pay way more than the last comparable sale.
Sellers are emotionally tied to their homes and that typically leads to overpricing. It is recommended that they take an emotional step back and look at all of the comparable data objectively.
What’s so bad about overpricing? Most activity occurs within the first couple of weeks of placing a home on the market. When a home does not generate offers within the first month in a hot real estate market, it typically means that the home’s price is not accurate. When homes adjust the asking price, it is after the deluge of buyer activity that has already taken place. It does not mean the home will not sell; it means that the buyer frenzy is missed and fewer offers are generated. Pricing a home accurately initially produces more offers and allows a home’s price to be bid up. Often homes are negotiated for at or above the full asking price. An accurate price allows a home to fetch the highest sales price possible.
The reason the Spring Market is the best time to sell boils down to a supply and demand issue. Demand is at its highest point during the spring and there is not enough supply. When supply is low and demand is high, the market favors the seller. The end of spring is around the corner and there are already signs of the market starting to shift. Demand is peaking right now and the active listing inventory is actually growing.
The reason demand is not continuing to grow despite a low interest rate environment and so many buyers waiting on the sideline ready to pounce on new homes that hit the market is twofold: (1) many homes are not realistically priced and buyers will not stretch to unreasonable heights; (2) graduations mark the beginning of all of the summer distractions, sidelining many buyers as they celebrate the successes of family and friends that graduate.
There is a cyclical downshift in buyer demand during the Summer Market. Summer is filled with distractions. That’s when the kids are out of school. Sand castles at the beach, a refreshing dip at the local pool, a picnic at the park, a trip to Disneyland, hiking in the local mountains, Southern California is overflowing with summer activities, distracting buyers from focusing 100% of their efforts on purchasing like they are able to in the spring. As a result, the active listing inventory increases, the supply of homes, and demand drops. When supply increases and demand decreases, the market cools.
Every year the Orange County housing market experiences a noticeable downshift and this year will not be an exception.