Numbers don’t lie. People do - especially those media outlets who thrive on biased, fear based headlines. Our intent here is to give you a picture of what’s really happening inside the real estate world with real facts, real context and no drama - so that you can make decisions that will work for you and your life. 
 
Inventory – yes, that’s the what experts are saying is the “crystal ball” or key indicator that will tell us what’s going to happen to home prices.
 
Nationally, active inventory increased by 30.7% year over year at the end of July.  
 
The yellow line represents national data for 2022.  Glance up at the Blue line – pre-pandemic normalized inventory levels. We are still far below that. So while it’s increasing, it’s still really low.

Check out this next graph which shows us that inventory growth has slowed down and shows us how low the inventory still is, despite the growth. Check out that dotted line too. That compares the inventory changes to 2019.

Locally, we are in a different boat.
Inventory has Actually Decreased 17.9% year over year (July 2022 vs. July 2021)

Month’s Supply has followed suit, Down by 16.1% year over year.
The 12 month average has us sitting at 2.6 months supply, which is the amount of months it would take all the homes on the market to sell. (A balanced market has 6 months supply of inventory.)

However, If we dive into the month to month data, we see month’s supply starting to inch up, and flatten out.

Same for homes for sale....

So, what does this mean?

The most important thing we can glean is that the market is slowing returning to a normal, more balanced market.

The key words here are slowly….and balanced market....

What does this mean for home prices?

Each region will be impacted differently. Overvalued markets like Boise Idaho, may see a 5-10% price drop in the next 2 years. Our market may see a 1-2% drop. Check out the maps below.

Now, experts are saying that if we see another recession, these predictions will change, and most markets may experience upwards of10% decline in home prices.

Let's get some perspective on that. The median house price in Orange County in 2019 was $260,000. It is now $372,750. That's a 43.4% increase. During the pandemic, most home sales occurred between December 2020 and August 2021. Most folks spent between 300-330K.

In fact, Since July of last year, the median home price in the OC has increased by 14.7%. So, If the worst case scenario happens, most of us will still be A-Okay.