According to a recent report by Scott Schang on www.car.org, the California real estate industry maintained significant momentum throughout 2012, but the diminished inventory created something of a frenzy in demand. The California Association of REALTORS® (C.A.R.) reported a supply of available of homes at slightly more than three months, less than half the normal average which typically sits at around seven months. This three-month supply was also the smallest inventory since the late summer of 2005. Supply downturns occurred in virtually every category of home but was particularly marked for homes with troubled loans. Two key metrics paint a busy picture:
- Short sales and bank-owned properties decreased in number 42% and 58%, respectively, compared to October 2011
- Equity sales decreased 15% from 2011
Such low inventory sparked furious changes in demand, as more properties sold above list. In fact, the number of houses which sold above asking price surged to over 33%, which was more than double the average rate of 15% over the past two decades. Buyers also paid more than asking at a greater clip in 2012 than they did in 2005, when the real estate industry was at the top of its bubble. More than a third of all bank-owned properties were also purchased at an amount above list, while over 30% of short sales fell into this category. Comparatively, only 19% of equity sales resulted in a greater-than-asking purchase price.
Such competition also meant that homes remained available for a much briefer period of time. In 2012, houses averaged about five weeks on the multiple listing service (MLS). Just a year prior, the average time on MLS was twice that. Five weeks is also the shortest average listing time on MLS since the peak of 2005.And the shortage of available homes is not expected to end anytime soon.
This year should be another of Irvine real estate receiving multiple offers above list price. All the more reason you should align yourself with an experienced real estate broker who can move as quickly as the marketplace. I know which Irvine homes are for sale and those that might be coming up for sale. Call me today in order to begin your search.