With such limited supply, this is the hottest November housing market in years.
Hot November Housing: With an expected market time of just 61 days, the Orange County housing market is still firing on all cylinders.
Buyers cannot get a break from the relentlessly hot housing market in Orange County. For homes priced below $1 million, there are simply not enough homes to satisfy the sea of buyers attempting to purchase. Moreover, November 2017 is exceptionally hot for this time of the year.
Just because Starbucks now has festive cups and holiday commercials monopolize the airwaves does not mean that the housing market slows. In fact, during this time of the year, if a home is priced right and in great condition, it will procure multiple offers, often times selling for above its list price. This will continue through Thanksgiving when the market transitions to the slower Holiday/Winter Market.
Within the last couple of weeks, the expected market time dropped from 65 days to 61. Housing is actually getting stronger. It typically does from October through mid-November. The difference this year is that the market was already hot and somebody just turned up the heat.
What is really at play here is that there are plenty of buyers who still want to purchase, yet fewer homes are coming on the market and many homeowners who have been on the market for quite some time are giving up and throwing in the towel in anticipation of the slower holiday season. The active listing inventory drops like a rock and demand remains steady. With a dropping supply and steady demand, the expected market time dips, and the market gets hotter.
Within the past couple of weeks, the active inventory shed 6%, dropping by 337 homes, the largest drop so far this year. On the other hand, demand, the number of new pending sales over the prior month, increased by 16, or 1%. That is precisely why the expected market time plunged from 65 to 61 days in such a short period. The supply of homes dropped and demand increased. At 61 days, this is the hottest the market has been in November since 2012, the beginning of the housing recovery.
Buyers are feeling the pinch too, as the number of homes on the market is evaporating before their very eyes. For the sellers that do remain, open houses are still packed, there are plenty of showings, and attractively priced homes in great condition are entertaining offers within hours of installing the FOR SALE sign in their yards. It is frustrating to be a buyer and glorious to be a seller.
In spite of the fact that Thanksgiving is just a couple of weeks away, November 2017 is going to be very hot for housing.
Tax Reform and Its Impact on Housing: California is going to be hit hard by the proposed tax reform
Many are asking how the proposed tax reform is going to affect the housing market right here in Orange County. Here’s how it will impact real estate:
- Lowers the mortgage interest deduction cap from $1 million to $500,000 (on all new purchases)
- Eliminates the mortgage interest deduction on second homes
- Homeowners would no longer be able to deduct the interest on home equity loans
- Eliminates state and local income tax deductions
- Caps property tax deductions at $10,000
- Extends the qualification period for exclusion of capital gains tax on the sale of a primary home from two out of the last five years to five out of the last eight years
Remember, at this point this is just a proposal from the House Ways and Means Committee. However, the House is attempting to pass a tax reform bill by Thanksgiving in order for it to move its way through the Senate and onto President Trump’s desk for signing by year’s end.
The tax proposal would hurt homeownership and remove incentives for buyers to purchase. Its impact would be significant and has the potential to shake up the housing industry especially in California and Orange County where the median sales price is much higher than the rest of the country.