People often ask if Orange County home prices will fall significantly in 2023. The short answer is no. The main reasons are tight lending standards over the past 10 years, and a historically low level of available homes to purchase. Today, in January 2023, there are 30 homes listed for sale in Cypress. The average Cypress homes for sale 2017-2019 (before the Covid market) was 45 homes for sale in January. And in the market crash years of 2008-2011, the January average exceeded 120 Cypress homes for sale.
With the 30 year fixed rate mortgage doubling from 3% in January 2022 to over 6% in January 2023, and a mild recession predicted for this year, many people feel housing prices will be forced to drop. Often, perception becomes reality by buyers feeling home prices will fall and delaying their purchase – contributing to making a price drop come true. But this time it appears to be a different market.
The top reason is, there simply aren’t enough homes available to purchase, relative to demand. In Orange County, there are currently 3,200 homes for sale. The 3 year average prior to Covid (2017-2019) was 4,980 – over 50% more than today – And that was a great market for sellers with rising home prices! In contrast, when the real estate market crashed in 2007, the number of homes for sale in Orange County was 17,800 – over 5 times more homes for sale than today.
In 2007, time on the market for homes before opening escrow averaged over 300 days. Today, the average days on the market before the average home sells is 54 days on the market.
It’s true, Orange County home prices are lower today than the frenzied peak in May of 2022 – about 10% lower on average. But home prices are still higher than January 2022.
When compared to any other commodity, the difference with homes is – we all have to live somewhere – whether we own or rent. And with 85% of mortgage rates locked in at 3.75% or lower, the average house payment is lower than rent for similar homes.
With low monthly payments and significant equity, there simply is no pressure to sell in today’s market. Today in all of Orange County, there are only 12 foreclosure and short-sell homes – less than half of 1% of available homes for sale. In 2008, there were over 4,000 foreclosures and short-sell homes on the market in Orange County – over 22% of available homes for sale that year. Those were must-sell properties, and prices dropped until they were sold.
Housing may soften from the super-highs of last Spring, but home values currently are insulated from crashing. Real Estate has a strong foundation of tight lending requirements the past 10 years, including historically high credit scores when loans were approved, historically large down payments, and historically large amounts of equity protecting homeowners.
If you are considering a move in 2023, working with an experienced real estate agent is critical in this market to insure you receive the most profit when selling. I have personally sold over 1,000 homes in Cypress. That’s experience you can trust. We can provide the right knowledge to insure you receive the highest price. Call me direct at: 800-944-2441, or email me at: Cary@Cary4Homes.com.
And Receive Even More Profit by taking advantage of my exclusive “Free Loan” to update your home when selling, with our:
Cary Concierge Service
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