It’s officially November! Can you believe that? I can’t believe that Thanksgiving is only a few weeks away and we only have 2 months left to the year! With society exiting from the pandemic, we are starting to see the return of a normal real estate cycle.
Every year as we enter November, people started to shift their focus towards the holiday shopping and gathering, We are now in the Holiday Market…the slowest time for real estate in terms of supply and demand. There are just simply too many distractions. As a result, the overall speed of the market cools slightly and the marketing time increases a little bit.
This is the time many sellers decide to hold off the selling until next year. We have started to see a slight dip in the number of homes on the market for sale. It went from 11,934 homes for sale in July in Los Angeles county to 11,407 homes for sale in October. We are seeing a similar drop in Orange County as well… went from 3,818 in July to 3,338 in October.
This number is expected to decline further.
With so limited homes for sale and few options for buyers to select from, many also put their home shopping desire on hold to enjoy the holiday, and that's one of the reasons we are seeing a drop in demand. As matter of fact, we are seeing a larger drop in demand.
The number of pending sales went from 6,779 in August in Los Angeles County to 4,019 in October and 3,092 to 1,484 in Orange County. That's a 40-50% drop!
One of the reasons we talked about is due to the seasonal cycle. Buyers simply put their plan on hold. Another reason is due to affordability. Price has simply gone up too much too fast. The income is not catching up to the speed of housing prices appreciate.
Median sales price in Los Angeles County went from $721,000 in January of 2021 to $810,000 in just 10 months and Orange County went from $787,000 to $915,000 in the same time span.
So what now? What we are seeing on the market is that good homes are still selling quickly and getting multiple offers and bidding war. Homes that are less desirable and in a certain area are not selling as well as buyers are being more cautious with their money.
It wasn’t too long ago that we saw any homes, good or bad, would sell. Things definitely looked different!