As summer winds down and families shift their focus with kids heading back to school, August brought a familiar calm to the Orange County housing market. Reflecting typical seasonal trends, the market saw rising supply and steady demand compared to the previous year. However, homes took longer to move from being listed to pending, which signaled a shift toward a more buyer-friendly environment. This shift led many sellers to adjust their expectations, with numerous homes closing below their initial asking price. As the market cools, accurately pricing homes is now more critical than ever to achieve successful sales.
Homes Going Off the Market
In August, there was a notable increase in the number of homes being pulled off the market, up 22% from July. A total of 676 homes were removed, which represents 18.3% of the available inventory. This trend suggests that some sellers, possibly frustrated with the slower pace or lower offers, are opting to wait for a better market.
Sold vs. List Price: What Sellers Should Know
A breakdown of the selling prices reveals an interesting pattern:
41% of homes sold above the list price – a significant drop from July, where 18% more homes achieved this.
12% of homes sold at the list price – this too saw a decrease, down 12% from the previous month.
47% of homes sold below the list price, a 5% increase from July, reflecting buyers gaining negotiating power as the market cools.
The trend of falling below asking prices highlights how important it is for sellers to remain competitive with pricing in the current market.
Buyers and Price Adjustments
In terms of price adjustments:
Only 5% of sales saw an increase in list price, a 10% drop from July, indicating that bidding wars and upward price adjustments are less common.
71% of homes closed without any change to their list price, although this figure is also down by 14% from the previous month.
24% of homes sold after a price reduction, which is a sharp increase of 19% from July, signaling that sellers are becoming more flexible to meet market demand.
Fewer Cash Buyers
The market also saw a decline in cash purchases. In August, 28.6% of homes were bought with cash, a 10% decrease from July. While still a significant portion of the market, this drop could indicate that buyers are increasingly opting for financing in response to market dynamics.
Looking Ahead
Overall, the August market reveals that Orange County is following expected seasonal patterns, with demand slowing slightly as the year progresses. Inventory continues to rise, and homes are staying on the market longer, which may force sellers to make price concessions. While mortgage rates remain a critical factor, those who price their homes correctly will still find success, despite a more competitive landscape.
For sellers, understanding the local dynamics and setting a realistic price from the start can make all the difference. Buyers, meanwhile, can benefit from increased negotiating power in a market that's leaning more in their favor.
If you're thinking of buying or selling in Orange County, now is a pivotal time. Reach out to discuss how to navigate these changing market conditions.
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