What to expect in the

February Yorba Linda Housing Market

It's only been a couple of weeks into 2023. And already we're starting to see some major shifts in the Yorba Linda housing market. So what are those shifts? And how are they going to impact the housing market moving forward as we get into February? That's exactly what we're going to talk about on today's episode. 

In Yorba Linda we started this year out with the second lowest inventory levels we have ever seen. The only time that beat that was last year when we started the year out with about 60 homes. This year we started the year out with 62. So it was almost a tie. Needless to say, there's just not a lot of options out there for homes in Yorba Linda right now, on top of that the biggest difference between last year and this year is we started this year with significantly lower demand as well. The demand that we started this year with hasn't been this low since the great recession, that was 14 years ago. So we started the year with extremely low supply and extremely low demand. However, as January's progressed, we're starting to see some interesting trends developing Yorba Linda.

Over the last couple of weeks, we've seen supply remain relatively consistent around that 60 home mark. However, demand on the other hand, is starting to increase week by week. So why are we seeing these demand numbers start to go up week after week? It has to do with a lot of different reasons. So number one is we're finally starting to see stability back in the housing market. At the end of last year, it was pretty chaotic in the housing market interest rates were going all over the place. There was really no predictability on what was going to happen. When buyers entered the market, they may be able to afford a home one week, and then the next week they couldn't. Some of them just gave up because they didn't want to deal with all that uncertainty.

However, this year, we're finally starting to see things calmed down. And we are also seeing interest rates go down week after week as we enter 2023. As interest rates go down, affordability is also going back up. And on top of that, we have seen depreciation over the last six months in the Yorba Linda housing market as well. So we're starting to see home affordability go up because of that as well. With homes less expensive, and interest rates going down, demand has slowly been rising every single week.

When you look at the Yorba Linda supply and demand numbers specifically compared to the rest of Orange County, we're actually seeing the market stabilized a little bit quicker in Yorba Linda than the rest of Orange County. There's a couple of reasons for this. So number one, over the last couple of months of the 2022 housing market, Orange County saw some significant decline in demand. However, Yorba Linda's demand remained relatively flat at around 35 to 45, pending sales every single month. Because it remained flat and didn't go down, we started this year with a little bit higher demand than you're seeing in the rest of Orange County. Again, demand is also continuing to grow week after week. Right now, even though the housing market is starting to heat up a little bit, we're still seeing depreciation in the housing market, we're still seeing homes on average take about a month and a half before they go into escrow. So we are by no means in a hot housing market right now. However, it looks like we're heading a little bit closer to stability. As long as these trends continue, hopefully by the middle of the year, we can get to some type of stability where we see home prices stop falling, but they're also not going up either.

So what does this all mean? As we enter the February housing market in Orange County? Number one, you're going to continue to see depreciation slow down. So although we're still going to see depreciation for a while, the housing market is like a giant ship, it's not going to turn around on a dime, it's going to take months of interest rates going down, as well as demand going up faster than supply to be able to see any type of home appreciation anytime soon, which again, I'm really not expecting anything like that to happen until at least the summertime if we continue the current trends

Number two, traditionally, in the month of February, especially after the Super Bowl for some reason, you start to see more and more sellers start placing their homes on the market as we get closer and closer to the beginning of the spring market. So if you've been looking for a home and you can't find anything right now, you will start seeing more hit the market as we enter mid February.

The third thing you can expect as long as these current trends continue with inflation going down, interest rates should continue to decrease. So although you're probably not going to see the major drops that we've seen over the last couple months in the housing market, you can expect interest rates to continue their slow march down. As we head through February, as long as inflation data keeps coming out positive, we will see those numbers come down. I'm expecting hopefully by the end of February, as these trends continue, that we might see rates back into the very high fives again, however, don't expect these giant half percent interest rates dropped like we saw at the end of last year, when we first started seeing inflation turning around. So yes, interest rates will be going down. However, they're not going to be doing so very dramatically and the same thing goes with home prices.

The fourth and final trend that you can expect in February, which we see almost every single year, is demand will continue to rise as well. As things start thawing out, hopefully as it starts raining a little bit less, you'll see more and more of these buyers enter the market because interest rates are getting lower and home prices are going down making homes more and more affordable as the weeks progress.

So just to sum it up, inventory should start going up in the middle of February, demand week by week should continue to increase, interest rates should continue to go down, and depreciation will slow down as we head through the month of February in Yorba linda. 

So what is my recommendations for both buyers and sellers? Make sure you watch the video above to find out! 

Thinking of buying or selling a home this year and have some questions? Schedule a quick 30 minute discovery call with my now by CLICKING HERE.