Are We Headed Towards the Buyers market?

Home prices are still going up, but buyers have more room to negotiate than they’ve had in a while.

So, are we heading toward a buyer’s market?

Well… not exactly. And here in South Orange County, we’re actually seeing something pretty different.  Let’s break down what’s really happening.

STORY

We hear this all the time.  Buyers are hoping the market finally swings in their favor, while sellers are wondering if they’ve already missed their opportunity.

And honestly, everybody wants a simple answer: Are we in a buyer’s market or not?

But here’s the problem with that question.

The market you hear about on the news isn’t necessarily the market you’re dealing with here locally.

National numbers combine markets all across the country, and that doesn’t always tell us much about what’s happening right here in South Orange County.  So let’s look at the bigger picture first, and then we’ll bring it back home.

YouTube: https://www.youtube.com/watch?v=qazsz9UldVY

The One Number That Matters

There’s one number that can give you a pretty good idea of which side has the advantage: months of inventory.

And it’s actually pretty simple.

If nobody listed another home starting today, how long would it take to sell all the homes that are currently available?

If there are fewer than four months of inventory, sellers generally have the advantage.

Four to six months is more balanced.

And once you get above six months, buyers typically have the upper hand.

Right now, nationally, we’re around 4.6 months.

So nationally, we’re in more of a balanced market — not really a buyer’s market.

Prices are still up from a year ago, homes are taking a little longer to sell, and buyers have more breathing room.

But South Orange County is a different story.

We’ve been running at a fraction of that inventory level throughout the year, and homes are still selling at or very close to asking price.

So we’re not sitting in that balanced range here. We’re not even particularly close to it.

And there’s a pretty simple reason for that.

South County is built-out for the most part. There just isn’t a lot of new land available to add a huge amount of housing.

So if you’re waiting for prices here to suddenly crash so you can swoop in and get a great deal, We think it’s important to be realistic about what our local market is actually telling us.

If You’re Waiting for Rates to Drop....

Now, this is where things get really interesting.

Mortgage rates are just over 7% right now, and they’ve been climbing.

So it’s completely understandable if you’re thinking:

"Maybe I should just wait. Once rates come down, I’ll buy."

Makes sense, right?

Here’s the problem.

That’s what a lot of other buyers are thinking, too.

There are plenty of people who got priced out of the market who are watching rates just like you are.

And when rates eventually come down, those buyers don’t necessarily come back one at a time.

A lot of them can come back at the same time.

And remember, a lower mortgage rate doesn’t suddenly create more houses in South County

So now you have more buyers competing for roughly the same number of homes.

And you know what that can look like?

Multiple offers.

Homes selling over asking.

Buyers giving up terms or contingencies they really would have preferred to keep.

So you could save some money on your interest rate, but end up giving some of that savings right back through the price or terms of the deal.

And, of course, nobody knows exactly where rates are headed.

We’re not predicting that.

The point is simply this:

Waiting for a lower rate isn’t necessarily the same thing as waiting for a better deal.

What Does This Actually Mean for You? 

So what should you actually do with all of this?

Well, it depends on whether you’re buying or selling.

If you’re buying, the softer national market can actually help you here.

You may have more homes to choose from.

You may have more time to think about your decision.

And you may have more room to negotiate on price, repairs, or other terms.

That opportunity is there right now.

But there’s no guarantee it stays that way.

If you’re selling, the big takeaway is that you can’t just put a number on your house and assume buyers will pay it.

Even in a market where inventory is tight, pricing still matters.

Your home can absolutely sell well.

But it needs to be priced based on the market today, not based on what the house down the street sold for two years ago.

SO WHAT NOW?

So when you hear a headline saying we’re moving toward a buyer’s market, just remember: that headline may not tell you what’s happening in your neighborhood.

The answer is really in your local numbers.

So if you’re thinking about buying or selling in Mission Viejo, Ladera Ranch, Rancho Santa Margarita, or anywhere else in South Orange County, let’s sit down and look at what the numbers actually mean for you.

The details are right below this video.