What's Happening With The Market...

With all the media out there reporting nothing but doom and gloom for the real estate market, I thought I would shed some light on some of the news that is not being reported.

The charts to the left are representations of supply and demand for real estate in the Orange County area. (Click on them for a larger image.)

The chart in red is a visual representation of the number of homes for sale each month in the past year. The green chart is representative of the number of homes that were sold starting in April of 2008 and ending in April of 2009. The blue chart is the number of homes under contract.



So what does all this mean and why is it good news? It all goes back to supply and demand. As you can see by looking at the red and blue charts, the supply is decreasing while the demand is increasing. If this trend continues there will be a period of stabilization. When there is stabilization, the number of houses being sold (supply), and the number of houses being bought, (demand), will be around the same number. As the number of houses for sale decreases and the number of sold houses increases, we could see an increase in the median house price, which is currently $385,000.

How do we know that demand (number of houses sold) will go up? That is where the Blue chart comes in. This chart shows all the homes currently under contract or in escrow. These homes are scheduled to close escrow in May. As of the time of this article, the number of homes under contract is 3,456 units. This is the highest it has been for at least the past year.

So why is this good news? Well, if the numbers are showing that we are starting to go up with demand and down with supply, the prices of houses, in theory, are on their way up. How high? Only time can tell us. However, this truly goes to show that now is the time to buy if you can afford it. There are great deals to be had and the interest rates are low which means that payments are low.

If you would like information specific to your area or if you would like to know your homes' approximate value, please e-mail me and I would be glad to assist you.

Thank you for reading, and as always, if you have any questions about real estate or a related fields please shoot me an email.

David Cuevas
Prudential California Realty
housingbydavid@verizon.net
www.housingbydavid.com