Looking Ahead to 2023
The South Orange County luxury housing market began 2023 with its typical post-holidays housing slowdown. The period from just before Thanksgiving to the end of January is usually the time of the lowest levels of listing and sales of the year, so it is difficult to determine any definitive conclusions about market trends from its numbers. However, one standout factor at this moment is the continued historic low inventory of houses available for sale. The greater Newport Beach market, which includes Eastside Costa Mesa, Newport Coast and Corona del Mar, has 232 properties listed for sale in the MLS currently (at the time of this writing), which is a fraction of 1 percent of the 30,000+ homes that comprise that area. Laguna Beach has 98 active listings in the MLS of the over 8,000 houses that are in that demographic. A normal inventory for this time of year in Newport Beach is about 500 listings and in Laguna Beach would be about 185.
Although the overall market cooled significantly in the last four months of 2022, largely due to a number of economic factors including inflation being at 40-year highs, volatility in financial markets and most significantly the Federal Reserve systematically raising interest rates; 30-year Jumbo fixed interest rates were at 3% in January of 2022 and now are at 6.1% in January of 2023, the overwhelming lack of inventory has largely held pricing at the historic highs of 2021-2022, the average price of a single family home in the Newport Beach market is presently near $4.6 million and conversely $4.3 million in Laguna Beach. This continued lack of homes for sale may provide a seller an opportunity to still sell at record high prices.
The early Spring market, which typically begins after the Superbowl, in early February, will typically provide the next indicators of market direction, but for the time being the market remains in a period of adjustment, with major economic conditions in flux.