In early 2019, things were changing in the Irvine housing market: the master-planned development at Irvine Ranch posted close to a thousand sales on a year-over-year basis, but this represented a decline of about 40 percent. Home sales in Irvine were down about 15 percent, and some home builders were rolling out incentives to qualified buyers for the purpose of moving their inventory faster. Prices are tapering off across Southern California as sales activity cools down, and sellers seem to be getting a little anxious about getting to the closing table. These are all signs of an ongoing transition away from a sellers’ market.
Economic conditions related to supply and demand tend to define the status of a market. In the case of residential property markets, strong demand for homes at a time when listings are limited results in a sellers’ market. The inverse situation is often referred to as a buyers’ market, but there are other factors to consider.
Housing Market Trends
Real estate analysts look at various trends and economic indicators to determine whether a housing market favors buyers or sellers. A buyers’ market occurs when there are more homes offered to sell than there are potential offers to buy, which prompts homeowners to lower their prices in an effort to sell within a certain time. Median price is another trend to consider because market participants are driven by figures, but there’s also quality of life to consider. In Irvine, quality of life is a driving factor that leans in favor of sellers, but higher median prices and lower home affordability will work against them.
The Ideal Buyers’ Market
Perfect conditions for house hunters include more available listings, prices listed close to regional median levels, a slower pace for buyers who need to take more time making decisions, and more room for negotiations. As previously mentioned, quality of life plays an important role that benefits both buyers and sellers, and it doesn’t shift as fast as other economic trends. It should be noted that a real buyers’ market is one where house hunters intend to occupy properties and settle down. A market full of distressed homes left behind by owners who could no longer find jobs in the area may attract lots of flippers and speculators, but it won’t be an actual buyers’ market.
Competitive and Balanced Markets
Irvine is more of a competitive market than a full-blown sellers’ market. As of January 2019, properties were getting an average of three offers from buyers, and they sold for about 2 percent under the listing price. Balanced markets take place when prices don’t fluctuate too much or when homeowners aren’t in a rush to sell.
Why Timing the Market Doesn’t Usually Work
Similar to Wall Street, housing markets can be unpredictable because of the many factors and conditions that define them. While real estate agents in Irvine recommend observing the direction of the market, they advise against trying to guess the perfect time to make an offer, particularly if buyers intend to quickly turn around and sell properties.
Whether you’re buying or selling a home, it’s best to work with seasoned professionals instead of trying to read the market on your own. The real estate experts at Irvine Residential Living have years of experience, and they know how to help both sellers and buyers get the greatest value out of their real estate transactions. Call one of our friendly agents today at 714-454-6304 to schedule an appointment.