LINK:  http://www.ocregister.com/articles/market-661131-home-year.html

The story is typical of this year’s housing market. After years of on-again, off-again home sales, it’s once again a seller’s market in Orange County.

But there’s a mystery afoot. Thousands of sellers have failed to materialize this year.

Steve Thomas of ReportsOnHousing.com reported last week that 14,400 Orange County homeowners have listed their properties for sale in the Realtor-run multiple listing database so far this year. That’s 3,500 fewer sellers than the period’s average for the previous 15 years.

Indeed, 2015 is the fourth straight year that home sellers have been turning out in drastically reduced numbers. Because buyer demand is up this year, the inventory of listings is well below year-ago levels – meaning that buyers like the Bausches have fewer homes from which to choose.

As of April 23, Orange County had 5,693 homes for sale, compared with 6,369 listings a year earlier, Thomas reported.

“Typically, when you have the recovery we’ve had in property values, people would be listing,” said Leslie Appleton-Young, chief economist for the California Association of Realtors.

“We’re not seeing that.”

The lack of sellers has left many local buyers with too few properties to even look at, much less make offers on.
“Every day, I would get up, hoping to find a condo that would meet my criteria,” said Katie Kissee, an accountant in Orange. “There were many disappointing mornings.”

“It’s frustrating there aren’t more (homes) to look at,” added engineer Dorian Flores, who still is looking for a house to buy with his brother after four months of house hunting.

Locked-up market

Experts say there are several factors that have locked many homeowners out of the market, from super-low mortgage and tax rates to high moving costs. Factors include:

• No place to move to: Fewer homeowners want to add their properties to those on the market because of the uncertainty of finding a new home.

• The high cost of selling: Rising home prices mean sellers hoping to downsize might have a smaller nest egg after buying a home, paying agent commissions and closing costs.

“When you crunch the numbers, it may not make sense to move,” said Betsy Kolberg, a mortgage professional in the process of selling her home in Orange for $20,000 over the asking price.

“It’s better to go to Home Depot and spruce the place up.”

• Impossible-to-beat mortgages: Many homeowners refinanced into mortgages 21/2 years ago with the lowest rates in a half-century. Borrowers with 3 percent interest rates likely won’t want to give those loans up, locking them out of the market for years to come.

• Prop. 13 tax rates: For most homeowners who have lived in the same home for a long time, selling and moving means giving up low property tax rates guaranteed under the 1978 tax-control measure.
Prop. 13 limits property tax hikes to 2 percent a year – until a home gets sold. Then rates reset to market values.

• People move less: In the 1980s, Californians averaged a move once every seven years, said Realtor economist Appleton-Young. Now it’s estimated they move about once every 20 years. “People are staying put longer,” she said.

All this adds up to fewer sellers, and a for-sale inventory that’s been persistently below the normal 8,500-home level for more than three years.

“The market is frozen,” said Westminster agent Dick Lobin of Century 21 Olympic Team. “It’s not a fluid situation.”

Gone in 55 days

The lower inventory is good for those who can sell their homes but bad for buyers.

Orange agent Lisa Blanc of Ricci Realty said every one of her listings this year has sold within a week.
Thomas reports that the typical Orange County home goes into escrow after 55 days, the fastest market since the summer of 2013.

The hottest market is in the $250,000-to-$500,000 price range, Thomas’ figures show. Those properties average 34 days on the market.

Homes in the $500,000-to-$750,000 price range typically take 39 days to find a buyer, while properties listing for $4 million and up average more than eight months on the market without a sale.

Upping the ante
After sharing a Costa Mesa apartment with his brother and parents for 10 years, Dorian Flores is tired of paying rent.

But in four months of house hunting, he found just one house in his price range worth a bid. The deal didn’t go through, and new listings are slow to come on the market, he said.

“(Listings) are kind of scarce,” Flores said. “There’s not a lot of homes in that price range all over Orange County. ... But I’m being patient about it, hoping we’ll get something by summer.”

Kissee, the accountant, finally found a condo after two months of checking online listings first thing every morning.

Bill and Cindy Maddox are moving this weekend to a new home they bought in Placentia before putting their house in Orange on the market. The property features two homes on a single lot, meaning the couple’s five children, ages 6 months to 18, will have their grandparents living next door.

In the four years since they purchased their house on East Adams Avenue, Bill Maddox – a contractor – has expanded the garage, added a room, redone the flooring, remodeled the kitchen and bathrooms, and installed new landscaping that includes fruit trees, grapes, herbs and a vegetable garden.

The home is ideal for the Bausches. A studio out back will be Richard’s workspace.

There’s a playground for their 9-year-old daughter. And plenty of room for entertaining.

“It’s perfect for us,” Cupolo-Bausch said.

But after upping their original bid by $25,000, the couple were contending with someone else for the home.
“We looked so long,” Cupolo-Bausch said.

“There was nothing with any character. Nothing else was coming up. We looked at very few houses because there were very little to look at. That’s when you go, ‘I better get realistic here.’”

The couple upped their ante an additional $10,000 and penned a letter to the Maddoxes, telling them how much they loved the house and how much they wanted it.

That did the trick.

The Bausches ended up paying $685,000, or $35,000 over the Maddoxes’ original asking price.

Contact the writer: 714-796-7734 or [email protected]