Thinking of buying or selling a home this summer in Orange County? Kids are getting out of school, the weather should be heating up soon, and the summer housing market has officially started here in OC. However, it's not what a lot of people expected. Interest rates have been on the rise in May, briefly going above 7% again, but at the same time the housing market is on fire with multiple offers on more homes than not, and home values are increasing for a 3rd month in a row. Why is this happening? Aren't we supposed to be seeing a giant housing market crash? It's all explained in my monthly housing market forecast for Orange County, check it out now!
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Can't watch? Check out my update transcript below.
Interest rates crossed above 7% again temporarily in the month of May and home prices in Orange County are still on the rise. So what the heck is happening? That's exactly what we're going to talk about today. Hi, I'm Josh Alexander, host of Orange County Housing market news, your one stop shop for all things Orange County real estate. So on today's episode, we're going to be talking about what to expect in the Orange County housing market in the month of June. So let's go ahead and get into
the weather may not feel like it. But summer is basically here in Orange County kids are about to get out of school, the weather should be heating up, hopefully soon. So what does this mean for the Orange County Housing Market? Well, like we normally do during these monthly updates, let's first look what happened last month in the month of May, and then go over what you should expect to see in Orange County, as we head through June and get into the summer months. So let's start with supply in May. So typically, during May, we usually see the most amount of homes out of any month hit the market in May, as people are getting ready for the summer. However, we have seen homes hit the market this year, just not anywhere near as fast as they usually do. We've only seen supply go up by about one or 2% per week during May, which is definitely a lot lower than normal and just to kind of give you some more stats on exactly how low the supply is right now, through the month of April, which is what we have the data on. So far, we've had about 45% Less homes in Orange County hit the market than during a normal year. Right now, we only have about 2200 homes for the entire Orange County marketplace. We're typically during this time of year, we have over 6000. So needless to say, over and over again, every single month supply is extremely low. And it's one of the biggest influencing factors on what's happening in the housing market right now.
Now, on the demand side, we really haven't seen much change in demand at all through the month of May, it pretty much is the same as where it started out. Now, the unfortunate part with demand is the way that it's measured is not going to be a very accurate predictor of what the actual demand is, because demand is typically measured by pending sale. So how many buyers are getting into escrow. But the problem is, let's say we have 50 buyers looking for homes. And with inventory so low right now there might only be 10 homes on the market. So even if those 10 homes get into escrow, that doesn't really account for the other 40 people that are still looking for homes, that this doesn't show up in the data. So those numbers for demand are really going to be skewed. So really the best indicator, what we have to look at what demand is doing is to look at future demand. And that's measured by mortgage application. So how many buyers are going to a lender to get that pre approval to go shopping for a home. And right now during the month of May, we saw declines every single week with those mortgage applications. And a lot of it had to do with interest rates shooting back up again in the month of May due to a lot of different factors.
But when interest rates go up, obviously demand is going to go down because it becomes more expensive to have a mortgage. Now the debt ceiling is one of the major reasons that we saw interest rates go back up, and they crossed that 7% mark for a little bit. But as soon as we got the announcement that they reached a tentative deal with this debt ceiling, we saw interest rates immediately fall after that back down to the sixes where they're hovering today. So although interest rates spiked briefly for about a week and a half, they're going back down to what they normally have been over the last few months, which is right around the six and a half percent range. Now the debt ceiling issue as well as interest rates are not the only reasons we're seeing mortgage applications go down. It also has to do with seasonality. So typically, during the month of May, we usually see peak demand for the year. And then it starts falling as we head into the summertime. Because buyers are going into summer, they're getting distracted by vacations going to the beach hanging out with family and friends. And they're less interested in purchasing homes. So it's very typical to see demand peak right before summer and then slowly decline as we head through the rest of summer, which in turn will usually allow inventory to continue to build through the summer months before it reaches its peak sometime in the early to mid fall before then falling as we head into the winter months.
So overall during the month of May, we really didn't see much change in the housing market. So yes, we saw inventory go up slightly, we saw demand stay pretty consistent. And really the month of May it was very much like the month of April we're seeing home prices continue to increase. In fact, over the last 500 sales in Orange County, about 60% of them went for at or above asking and when that's happening, you are seeing home values increase you're seeing multiple offers on a lot of different properties have open houses and there's really no indication that's going to change anytime soon either because supply and demand really is just not budging very much from where it is right now. So unless there's something major that happens that impacts either supply or demand, there's going to be a very good chance that this trend of slowly appreciating houses in Orange County is going to continue through the month of June. Now does this mean that every home in Orange County is going to have multiple offers on it and be very competitive? No, a lot of it is going to have to do with price ranges right now. Anything under 1.5 $5 million is definitely in a hot seller's market, anybody trying to sell a home or buy a home in that market should understand that you're going to have pack open houses, there should be multiple offers on a lot of those properties. And most likely, as long as it's priced correctly to begin with, it should go for asking price or slightly above. Now, once you get above 1.5 million things do calm down a little bit, it's still a slight seller's market above 1.5 million, however, homes still take a little bit longer to sell.
There's not as many multiple offers and not as many of them are selling above asking price. So depending on what type of home you're looking for, or selling, the market is going to be a little bit different. So that's why it's important to be able to talk to an agent about your neighborhood about your price range to figure out exactly what to expect for the home that either you're looking for, or the home that you're trying to sell. So when you get into the market, you have a really good understanding of what is going on. So you know exactly what to expect. So this brings us to what to expect in the month of June in Orange County's housing market. And we talked about a lot of it already. But just to recap, you should pretty much expect a lot of the same that you saw in May, as long as interest rates stay in that mid 6% range, which is where they've been hovering for the last few months. In general, you should expect inventory to slowly build week after week, demand really is going to stay about the same, it will go down a little bit. However, it really won't feel like that, especially under the $1.5 million range, because it's going to be very competitive in that space. So if you are thinking about getting into the market in the month of June, what should you expect as both a buyer and a seller, let's go ahead and start with buyers first. So buyers. Unfortunately, if you haven't really been paying attention to the market in the last month or two, it could be a very rude awakening when you go to start placing offers, and you see how packed open houses are, and how you're having to compete again, with so many different offers going above asking price, lowering contingencies, sometimes having to take them off just to be competitive, you thought those days were over with COVID.
However, it's coming back because inventory is just so low. Right now, there's just not enough homes on the market to be able to meet the demand out there, even with demand. So low inventory is lower right now. So when you go in to purchase a home in the month of June, you have to have that mentality and expect that you're going to have to place aggressive offers, you need to also be aggressive about looking at the home. So as soon as it hits the market within that first week, you need to see the property and place an offer on it. Because otherwise, most likely it's going to be in escrow, especially if it's priced correctly within the first five to seven days. So you just need to try to keep your schedule as open as possible. So when those properties do pop up, that do meet your criteria, you're able to tour them quickly place an aggressive offer, and give yourself the best chance of getting into a home. Now if you're not sure what an aggressive offer looks like, or what you can do to place a good offer in today's market. If you're watching this on YouTube, I'll put a link right at the top. But that basically goes over how to write a competitive offer in today's market. If you're not watching this on YouTube, head over to my YouTube page, Orange County Housing market news. And you'll be able to find that video and a bunch of other things to help you win in today's market. Now on the selling side of things, especially if you have a home that's less than $1.5 million, you're in a very good position right now, you still have to price your home correctly, because buyers especially with rates so high are still being hesitant about placing offers and are still being selective about when they're placing offers.
So if you don't price it correctly, you won't get as much traffic as you could. So make sure you have a good pricing strategy when you place your home on the market. And you have a great marketing strategy as well to basically make sure that that home is spread on every social media platform in every possible way to get your house as much exposure as possible. If you do this, you should have success in today's market. If your home is above 1.5 million, that just means that you have to be even more careful about where you price it because there will be a lot less competition in those price ranges. So if you don't price it correctly, it could be sitting on the market for weeks and weeks before you're eventually forced to reduce the price. And when you reduce prices.
We all know that that's when the buyers come out of the woodwork start offering you a lower than asking price and try to get a deal because they think you're desperate to sell. So making sure that you price it correctly out of the gate the first time is extremely important today's market and all price ranges. But especially in the higher price ranges to make sure that you're getting the maximum exposure and the best chance possible to get your home into escrow quickly and at the best price because after three weeks of it sitting on the market, the interest level is going to decline rapidly and you're going to have a much harder time finding the right buyer for your home at that point. Now again, if you are thinking of buying or selling a home during the summer time and you found today's episode useful, please consider subscribing to this channel because I put out new videos every single week to help you both buy and sell homes within Orange County and making sure you have the best chance of having a successful transaction. And if you know anybody that might find this information useful, please consider sharing it as well. I would really appreciate it. So until next week, stay happy, stay healthy, and I'll see you on the next show. Bye everybody.