Understanding the Orange County Real Estate Market: Key Trends for Fall 2024

Understanding the Orange County Real Estate Market: Key Trends for Fall 2024

As the real estate landscape in Orange County, CA, including Costa Mesa, evolves, it’s essential to cut through the noise and focus on the most relevant trends impacting buyers and sellers. Here’s a concise look at the top trends shaping the housing market as we head into the end of 2024. This information is a summary of The Orange County Housing Report by Reports on Housing dated October 28, 2024. For full access to the report and date, please email [email protected].

1. Mortgage Rates Impacting Demand

The sensitivity of the housing market to mortgage rates has been particularly evident this year. After being stuck above 7% for several months, rates dropped below 6.5% at the end of August, resulting in a noticeable uptick in demand. From mid-September to early October, pending sales increased by 13%, and the Expected Market Time (the average number of days to sell a home) decreased from 78 to 69 days. However, October has seen a rise in rates again, now hovering around 7%. This fluctuation may slow down the momentum gained earlier in the season, affecting buyer activity throughout Costa Mesa and the broader Orange County area.

2. Inventory Levels and Seasonal Trends

Typically, inventory levels in Orange County peak in late summer, but this year has shown a different trajectory. The active inventory rose to 3,694 homes in October, up 21% from July. In Costa Mesa, the market reflects similar trends, with limited housing supply impacting local buyers. As mortgage rates increased, fewer homeowners opted to sell, leading to a slower decline in inventory compared to previous years. Expect inventory levels to drop as we approach the holiday season, similar to trends observed in past years, which may create more favorable conditions for buyers in early 2025.

3. Buyer-Friendly Conditions Emerge

The current market has shifted towards favoring buyers. The Expected Market Time has lengthened, with many homes in Costa Mesa and surrounding areas remaining on the market longer. Approximately 35% of active listings have seen price reductions, with a median drop of about 4.43%. This dynamic gives buyers more options and leverage in negotiations, as sellers become more willing to consider favorable terms.

Conclusion

Navigating the Costa Mesa real estate market, along with the broader Orange County housing market, requires a clear understanding of ongoing trends, especially regarding mortgage rates, inventory levels, and buyer conditions. As we move towards the end of 2024, staying informed will help both buyers and sellers make strategic decisions in this ever-changing market. For more updates and insights on Costa Mesa real estate, keep an eye on market data and trends in the coming months.

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