What actually happened in the OC Housing Market in 2024?
2024 was ‘noisy‘ for a ton of reasons, but it was a rather normal and boring year.
Let me explain why…
Fast Value: Prices had above average appreciation of 6% in 2024. We also had the fewest sales in OC since the 90s. There were more homes that sold in the 2008 crash than in 2024. Interest rates stabilized in the 7% range when many thought we’d see 5% – 6% rates.
To give a clear overview of what happened over the year, I’m going to break down the few major things that we saw. The goal of this is to give you the information you need to make a better decision for your next move.
Here are the major things that we’re going to look at:
- Total number of sales
- Interest rates
- Available inventory
- Prices
Total Number of Sales
There are no two ways to put it. 2024 was a crazy slow year when it comes to the total number of homes that sold.
How does that affect you?
It means that supply is crazy low. (again)
Tons of people have been talking about “low inventory” since 2020. But that doesn’t paint the full picture.
2020 – 2021 had crazy low inventory. But it was available inventory. TONS of homes sold. We’re talking 20% more sales than a normal market. That is a huge increase.
That is why it felt like everyone you knew bought and/or sold in those years.
(this screenshot shows the total number of sales per year since 2008)
Every listing that hit the market sold immediately. There were 15 offers on every home. It was literal mayhem.
That happened because there was WAY more demand than there was supply.
But…
We still saw a lot of homes being sold.
Now, to talk about 2024… We had the fewest homes sell. 46% fewer homes sold than in the 2020 – 2021 markets that I just explained. Yes. Half as many sales.
Now, there were still 35% fewer sales from a normal market. 1/3 fewer sales than we would expect to see in a normal market.
THIS… is why the housing market has felt so slow over the last two years. Especially 2024.
Interest Rates
This will be a rather quick section.
Everyone was expecting rates to drop more than they did. We had a TON of noise around interest rates, while not a whole lot actually changed.
We had an election, the fed moved the Federal Funds rate, but mortgage rates didn’t really change.
We’ve normalized in the 7% range – plus or minus.
(as you can see in this chart, we’ve seen rates bounce up and down but mostly stay in the same range)
Available Inventory
If you zoom out and look at the whole year, you’ll see a 10% increase in the available inventory in 2024 over 2023. This is great news.
But the news gets even better if you zoom in a bit closer. Inventory didn’t slowly increase throughout the year. There was a huge increase in the beginning of the year, and then most of it fell off in the winter.
(as you can see in this chart, we peaked at 4.700 listings in August, which dropped back down to 3,100 in December)
More is definitely better for the health of the market. A ton of those listings were sitting and not selling, so they were removed from the market in the second half of the year. Sellers wanted to wait until the new year to re-list to get their price.
The homes that did sell had 3 things
- Looked good
- Priced right
- Marketed well
The homes that didn’t sell were missing at least one of these.
Prices
What everyone is waiting to hear about.
Prices went up in 2024 in Orange County. An above-average price appreciation of 6% over 2023 prices.
There really isn’t a ton to say about this.
Buyers are still in the market and want to make deals. However, they’re not falling over each other like they have in the past, which is a sign of a healthy market.
(as you can see, if you zoom out, you can see a somewhat smooth climb up in price.)
If you zoom way out, you can see what prices have done since 2008.
Prices always go up and down. If you zoom out far enough, prices go up.
Prediction for 2025
Moving closer to a normalized market. I think we will see more homes sell in 2025, which will keep up with buyer demand.
Interest rates will lower throughout the year, but we won’t get below 6%. I think we’ll end 2025 closer to 6.5%. Nothing worth waiting for.
We will see another boring and normal year of price appreciation.
Homes will sit on the market longer. We will see a 20-30 median days on market in 2025.
Obviously, I don’t have a crystal ball, but this is what I think will happen.
We have a pretty good pulse on the market. We have thousands of conversations with customers in the market, just like you. We do hundreds of deals every year. I’ve personally been writing market updates every single month for the last 3 years.
Advice for sellers:
You have one opportunity to make a first impression. Here is what is selling.
- Looks good
- Priced right
- Marketed well
Do not wait until the last minute to call your agent. Get your agent involved early.
Take advantage of a Seller Strategy Session way before you’re ready to list.
Advice for buyers:
Negotiating in a more neutral market is harder. There is more room to pay too much, just like there is more room to get better deals. Ask us about our 7 Saving Strategies and set up your Buyer Strategy Session.
Advice if you’re buying and selling:
Call your agent. Now. You’re going to have more options available to you this year that just simply haven’t been options in the last few years.