The spring balancing act...

Attention, everyone! Brace yourselves for some bold and forceful expert opinions. Now, I don't possess a crystal ball, and anyone who claims to have one is either misguided or fibbing. Trust me, that's not a good sign.

Last May, I gave a warning to home sellers, urging them not to wait for the summer market to sell their homes. Turns out, I was absolutely right. By the end of April 2022, housing inventory was on the rise while sales were declining. Thankfully, many heeded my advice, and the market has since regained its footing.

Let's take a look at the numbers from April this year. We had a sell-through rate of 46% for homes on the market. Sure, it's not as impressive as the heyday of 55% in April '22 and 63% in '21, but compared to pre-Fed interest rate drop figures ranging between 25-35%, it was a solid month.

However, March outshined April in terms of performance. As we cautiously step into May, the number of sold homes remains unremarkable, although prices are holding steady and the days to sell are decreasing.

Now, let's bid adieu to 2022, dear home sellers. The peak median price of $1,060,000 from May last year vanished quickly. It took until the end of June for it to reappear. Currently, we are witnessing another peak, with April's median sales price dropping from March. Additionally, we faced a similar threat of rising interest rates this spring, which could have potentially cooled down sales for several months. Are we experiencing "Groundhog Day" all over again? Not yet.

But here's the deal: we can't simply assume that things will magically pick up in the summer. That strategy didn't work out well last year. Instead, it took a whole nine months for the median price to bounce back. Right now, median prices are maintaining but not experiencing significant growth, while the time it takes to sell a home has dropped dramatically.

Remember, no one has a crystal ball, not even me. Last May, we didn't know for certain what would happen when OC's median price fell from $1.06M in April to $1.05M in May. And today, we're still in a realm of uncertainty. However, we can analyze the signs and sound the alarm that NOW might be the best time to sell your home. Waiting to see if the market improves further is a fool's errand, just as I mentioned last year. Don't hold your breath for the "traditional" summer market to pay off for sellers.

Now, this doesn't necessarily mean a market crash is imminent. The days on the market have reached a 9-month low, indicating increased competition among buyers. In April, homes sold at the fastest rate in 9 months, which could potentially push up the median sold price in May. However, there's always a chance it won't. Rising interest rates have a more chilling effect than almost any other market influence.

To sum it up, this is an ideal moment for buyers to jump back into the game, unlike any we've seen in recent months. Yes, mortgage rates are ticking up, but you can always refinance later when rates fall (which is expected by year's end). However, you can't renegotiate a home price after the sale closes.

Choose your battles wisely.

Sellers, beware of the Fed's approval of another rate hike. It might stall the market and put a damper on summer sales. So ask yourself, "Do I feel lucky?"

April concluded with the lowest number of homes sold since January 2015. Feeling lucky now? We find ourselves in uncharted territory, where no one can definitively predict which way the market will go from here.

But here's what I can tell you: if you need to move, this is a golden opportunity to sell and capitalize on prices that are below their peak, allowing you to buy your next home. As for buyers who aren't selling their current homes, all we know is that we're in a period of price instability. Buying now is a wiser bet than continuing to rent.

In December, OC's median price hit a bottom of $920K and steadily rose month over month, until it dipped from $975K in March to $950K in April. However, it has already climbed to $980K in early May. During the same period, median rental rates hit their lowest point at $3,900 in November and have been steadily rising, reaching $4,150 by the end of April. Rental rates have not fallen in the past six months.

Over time, those who bet against housing consistently lose. That's precisely why many major companies, from Zillow to Amazon, have ventured into real estate brokering. As the economy contracts, the big players are shifting their focus to real estate. Unfortunately, smaller companies like Villa Real Estate are folding under the pressure due to the scarcity of available homes to sell.

I understand that Fortune 100 company executives likely have better intel than I do, and you should consider that too. If you sell at a slightly lower price today, you'll also buy at a lower price. And if you're renting, there's zero chance you'll benefit from waiting. The housing inventory is too scarce to make waiting a sensible decision.

And as ironic as it may sound (cue my friends' cringing), if home prices rise while you're waiting to buy, I'll make more money. But let's aim for a win-win situation. I'd much rather it be a "win" for you.

Now go forth, armed with this information, and make your moves wisely in the Orange County, California real estate market.

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amend this noting that in recent weeks May's median home price has risen to $980,000

ChatGPT

In recent weeks, May's median home price has experienced an increase and now stands at $980,000. It's important to keep an eye on this upward trend as it may impact the market dynamics going forward. While the market remains unpredictable, this rise in median price highlights the potential for continued price instability. Buyers and sellers should stay vigilant and make informed decisions based on the evolving conditions in the Orange County, California real estate market.