Orange County Real Estate Market - End of Year Recap 2022
The South Orange County luxury residential housing market has now entered the two-month-long Thanksgiving to New Year holiday period, which historically is the time of year with the least number of sales and lowest listing activity.
Many sellers, especially those who have not had success selling, start pulling their properties off of the market to wait for the more vibrant Spring market. Yet it is still important to remember that the buying and selling of luxury homes continues at this time of year, albeit at lower levels, and this can be an excellent time to purchase for buyers who wish to submit lower offers or offers with terms, since there is less buyer competition and many sellers hoping to sell before the end of the year.
2022 will likely go down in the “residential real estate history books” as one of the most unusual years on record.
We started the year with a pandemic frenzy of buying, largely fueled by very low interest rates, the intent of the Federal Reserve to raise interest rates, historic low levels of homes available for sale, and extraordinarily high buyer demand. However, even at the start of the year, despite all of the craze in the market, there were severe economic headwinds that were looming: the highest inflation in four decades, by May, mortgage interest rates had already increased 69% in 2022, the stock market had declined; the S&P 500 was down 14% and the Nasdaq, 22%, and overall, there was anticipation of a slowing economy and a possible recession. The first effects of these market factors were seen in buyer demand; fewer buyers translated to fewer offers and fewer listings going under contract, and by July, the number of homes for sale had doubled and nearly one-third of the listing inventory had experienced at least one price reduction.