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As 2010 comes to an end, and we begin to start a new year in the South Orange County Real Estate market, there continue to be great opportunities for buyers and hopes continue amongst homeowners that there will be improvement in the health of the market. A review of the market indicators shows improvements in inventory levels and sales volume; however, the negatives of high foreclosure rates, Notices of Default, and tight restrictions on financing continue to offset any advances in the marketplace.
As 2011 begins, our inventory levels of existing resale homes has dropped to 793 units, down from 812 in 2010 and the high of 967 in 2009, but nowhere near the lows in 2004 of 290 available units. The luxury housing market continues to show the largest inventory levels, which seems to separate at prices over $1.3 Million, with current absorption rates in excess of an 18 month supply. There are presently 49 bayfront homes and 29 oceanfront homes available for sale in Newport Beach and Corona Del Mar, which are still the highest levels in over 25 years.
As stated earlier, the largest impediment to the market is the abundance of homes that either have a Notice of Default filed against them or have already been taken back by their lending institution. Over 58% of the current properties in escrow are short sales or REO’s and 23% of the closed sales in 2010 were bank related transactions – interestingly that is only 2% percentage points less than the national average, which is not positive information. In particular, the last few months have seen an abundance of expensive homes as REO’s and these properties seem to be found in every luxury neighborhood in our market.
The sales volume in 2010 was higher than in the last four years with 1,291 units closing in our defined market – that is good news and with more sales in the higher price ranges than the past two years; however, again nearly 23% of those sales involved bank short sales or REO properties. Our market continues to feel a downward pressure on prices because of this abundance of transactions. As of January 1, there are still over 1,000 properties in our area with recorded Notices of Default against them.
The beginning months of 2011 will give us prime indicators of the health of the market. Please continue to return to our site to review our comprehensive data of the marketplace.
In the interim, we hope all of your real estate needs and wishes are fulfilled.
Steve High and Evan Corkett