Home Shopping Tips for Orange County, CA

The Orange County, California housing market continues to experience a low supply homes for sale due to strong interest from buyers. Due to this fact, home buyers must have all their ducks in a row when searching for a home in Orange County in 2018. The following is an up-to-date glance into the local housing market, as well as some excellent advice for home shopping success.

 Home Shopping Guide for Orange County: 2018

Limited supply. Solid competition. Fast transactions. Those are several items prospective home buyers can mot likely anticipate. Having said that, here are a few things you may want to do prior to searching for a home in Orange County, to maximize your likelihood of closing on a purchase.

1. Study and become familiar with existing home prices in your desired area(s).

According to the California Association of Realtors, home prices in Orange County have remained steady during the last two years. The median sales price for single family homes reached $786,600 in October 2017.

That is the media value, not the average home sales price. The median value can be skewed when numerous multi-million dollar homes sale and fewer low priced homes were sold in a given month.

Buying in North Orange County vs. South County

This market offers a broad range of home prices, so you’ll want to zero in on the area(s) where you plan to buy a home. The median sales price for many areas in Orange County fall range from $550,000 and $580,000. But the median sales price can be $1 million in new home developments, or $788,000 for n existing home in Irvine. There's a diverse selection of prices.

2. Get pre-approved for a home loan, so you can compete.

Inventory is still very limited in the Orange County housing market. As of October 2017, the county had a 3.5 to 4 month supply of residential homes for sale. For a balanced market six months would be the normal measure.

This fact emphasizes the importance of being pre-approved for home financing, prior to looking for a home in Orange County. Savvy sellers and realtors strongly prefer interested buyers to have their financing prepared in advance, prior to making a purchase offer. For the buyers who are paying all-cash, they will need to provide bank statements showing they have the necessary funds to purchase the home outright.

3. Hire an experienced real estate agent to represent you.

Based on recent real estate data and research, Orange County, CA is becoming less of a sellers' market. In October, pending home sales fell for the fourth consecutive month fell. The decline was just 2.6%, but that follows a year-over -year 6.6% drop in Sept, and 3.5% in August.  

With this facts, it is even more reason to work with an experienced real estate agent when searching for a home in Orange County. Wouldn't you want every possible advantage when house hunting in Orange County.

The market could be slowly changing but a home in a high demand area like Orange County will for the most part remain competitive for buyers.

Homeownership Rate Continues it Fall in 2016

The rate of U.S. homeownership decreased to its lowest level in more than 50 years caused by soaring home prices that keep purchasing unrealistic for numerous renters.

The percentage of Americans who own their homes was 62.9 percent in the second quarter of 2016, the lowest pace dating back to 1965, based on a Census Bureau report released on July 28. Moreover, it was the second straight quarterly decline, falling from 63.5 percent in the prior quarter.

Rising home prices are making homeownership simply out of the question for households that are leasing their residence.

First-time buyers have found it difficult to locate reasonably priced real estate as low interest rates and a strengthening job market promote competition for low inventory. Home prices rose 5.2 percent in May from a year earlier, according to the S&P CoreLogic Case-Shiller index of values in 20 cities released this week.

Many experts claim that the largest obstacles is affordability. Home prices are going up a lot quicker than incomes, so it's tough for prospective buyers to save up for a down payment.

In June 2004, the homeownership rate reached a peak of 69.2 percent.  In June 2016, the homeownership rate for Americans between the ages 18-34 dropped to 34.1 percent in the second quarter in contrast to 34.8 percent the prior year, according to the Census Bureau.

The bottom five states in terms of homeownership percentage are Hawaii, Nevada, California, New York and Washington D.C.   The average rate of homeownership in California is 54.3% compared to its peak of 60.7%.

 Back in 2006. This percentage is due both to prices in California exceeding average incomes and to the anticipated rise in mortgage rates, likely to begin in the second half of 2016.

California's lower rate of homeownership should not be that alarming since it is typically lower by ten percentage points from the national average due to the higher cost.

The National Association of Real Estate Brokers (NAREB) reports the homeownership rate for blacks is 41.7 percent, which is less than the national homeownership level during the Great Depression. The rate is the lowest of out of all races in the USA. While, the home ownership rate for whites is 71.5 percent,  asians at 59 percent, and hispanics at 59 percent.  In California, the homeownership rate is 62.9% for whites, 56.7% for asians,  41.9% hispanics, and 34.5% for blacks.

The housing industry and consumer advocates state that homeownership can put families on a path to financial stability by compelling them save, provide a place to retire and enable their hard asset to appreciate into the future. It additionally makes people more involved in the neighborhood, effecting higher property values, and lower crime.

OC Home Values 30 Years Ago

Trulia recently analyzed median home values from the period 1986 to 2016 of the 100 largest metro areas.

What was learned is that real estate in the Western U.S. (metropolitan areas in California, Oregon, Washington, and Hawaii) generated the highest return of investment, fetching nine spots in the top ten. Trulia determined that people's rising income in the region along with new housing developments were largely responsible for adding to the region's housing price appreciation.

In Orange County, CA  the historical statistics are
1986 median home value: $143,210
2016 median home value: $643,483
Gain: 349.3%

For new homes in the period ended Aug. 8, 2016, Orange County’s median selling price was $742,000, a decline of 7.2 percent from the prior year.

Reports from analysts at PropertyRadar and the California Association of Realtors showed.
1. Sales Decline: Californians purchased 37,823 single-family homes and condominiums in July, which is a decrease of 12.8 percent from July 2015. Year to date, home buyers have purchased 2 percent less from 2015.

The median price of a home in California was $438,000, an increase of 5 percent from 2015. The median-priced for a condo was $417,000, which is a rise of 4.3 percent from $400,000 in July 2015.

Less all-cash buyers in 2016: Does it mean there's less cash-rich buyers or just more people applying for and getting financing?  Not really, as there were 13 percent less buyers not obtaining mortgages in July compared to July 2015.  All-Cash purchases accounted for 18.1 percent of total purchases compared to 19.9 percent from July 2015, and 40 percent of all purchase transactions in August 2011.