February 2014 Irvine Housing Market Report
As we get ready to “Spring forward” by turning the clocks ahead next week, we should take a look at whether the February 2014 Irvine housing market report has remained the same or will the future housing market continue its upward trend in calendar year 2014. The question is are we experiencing the pause that will refresh, or are we embarking on a new trend.
It is clear that the month-over-month comparisons from calendar year 2013 will not look as optimistic as we have experienced over a 20% gain in Irvine and cannot expect more than a 6 to 8% price appreciation in calendar year 2014.
In addition, as the inventory increases, and the interest rates creep up to buy a home, the days on market of existing homes for sale will extend out, and Buyers might be more cautious in jumping in to buy a home.
Builders in Irvine Are Releasing More Inventory in February 2014
The new home builders that ring Irvine are becoming more optimistic and are releasing more homes to the Irvine housing market with each phase and with each succeeding phase being brought to market more frequently. The aggregate supply of new homes each month has more than tripled than it was a year ago and is predicted to multiply. The previous cautious posture of the builders has been replaced by a more aggressive stance and is looking more and more like the height of the market that we experienced in 2005. This may impact the Irvine Housing Market Report in the coming months.
Homeowners Are More Optimistic
In addition, homeowners who experienced years of price declines are beginning the process of planning to capitalize on the healthy market. The aggregate demand of Buyers each month is more constant than the potential supply of homeowners who choose to put their homes on the market or not. We should know within the next 60 days whether the inventory will outpace the demand and begin to flatten out the prices here in Irvine.
The inventory to sales activity here in Irvine remains healthy. Further, we expect most of the gain in the early part of the year and a flattening as we approach the summer months.
We expect interest rates to move up by a half of a percent by June 2014, and with the interest rate over 5% for 30 year fixed, we believe that will have an influence on the rate of appreciation. In addition, as the prices of homes go up, the percentage of all cash buyers will continue to go down.
The real estate market continues to exhibit the health, breadth, and vitality that is symptomatic of better things to come–albeit at a slower rate of acceleration.
How’s the Real Estate Market Going into the Spring?
The real estate market is strong and remains strong. Prices are stable currently. Orange County real estate prices were up over 20% year over year. Irvine real estate prices are up over 25% year over year. However, the Case-Schiller Index started to show change in its most recent survey of 20 cities. In indicates a slowing of macro demand nationwide. As we approach the Spring selling season, we expect the Sellers to remain optimistic in their pricing of their homes. The question remains whether the Buyers will continue to pay the listed price.
As of February 23rd, the current inventory in Irvine of 445 homes available and a total of 280 homes in escrow. While the inventory continues to increase, (5% larger inventory month-over-month), the homes that have gone into escrow have increased dramatically. There are more than double the number of homes that have entered into escrow from January 2014. This might be more of an early Spring rather than a continued burst of activity. The price appreciation is the key to determine continued momentum.
We are including our FREE market report, so that you may keep abreast of the conditions impacting your local neighborhood in Irvine. We believe our city is a unique real estate environment. While macro economic conditions impact our local housing market, we cannot and should not rely solely on National and Countywide news sources for our local housing trends. These broader housing statistics do not accurately reflect what is happening in your local neighborhood. While the nation had 12% growth year-over-year, according to the Case-Schiller Index, we had 25% growth.
Our monthly reports track your neighborhood’s inventory, median price, price per square foot, median sales price, average days on market and more. Our market reports are updated regularly, and are FREE to you, so that you can stay “ahead of the curve” as to the direction in which the housing market is heading throughout the year and at absolutely no risk.
Take a look at the current charts below to get a picture of what have outlined for you.
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