Soaring to New Heights?

...or ready to plummet?

Orange County housing data invites interpretation through the lens of one’s own ambitions and anxieties—like Icarus, many see only what they hope to soar toward, or fear to fall from. The path ahead remains more uncertain than ever.

Is This 2022 All Over Again?
Remember that rollercoaster year when home prices soared January through April… then plummeted like a botched soufflé? Some are whispering (okay, hoping) that we’re in for a sequel. Too early to tell, but April is already dropping some clues.

By month’s end, the median home price crept up 4% year-over-year. Not terrible. But compared to last March’s eyebrow-raising 14.4% bump, it’s… well, underwhelming. Like ordering champagne and getting flat soda water.

Sales: Stable, but Sleepy
Closed sales were sluggish. Just 10 fewer homes sold compared to March 2023—but I expected more. Inventory ticked up with 658 new listings, par for the seasonal course. Still, the tiny dip in sales could be the start of a trend… or just a market hiccup. We’ll know more once pending sales hit the books.

What the Pending Data Hints At
The real tea lies in pending sales—homes headed to the finish line. Their median list price is $1,194,000, compared to March’s $1,299,000 list price and $1,200,000 closed median. Normally, the list-to-sold gap sits in a cozy 3–5% range. In March? It spiked to 8.25%. Start of a downward trend… or just a fluke?

If pending deals close 4–5% below ask, April’s median could land around $1,146,000. If that 8% gap holds, we’re looking closer to $1,098,000—a notable drop, but not exactly historic. We saw a similar dip in April 2023. So, let’s not clutch our pearls just yet.

“Active Under Contract” Listings: The Wild Cards
These in-escrow homes (where buyers are still poking around during due diligence) carry a median list price of $1,220,000. If a bunch of them close this month, April’s median might hover around $1.2M again—flat, but not tragic.

Sellers: Bold or Bonkers?
The true chaos lies with active listings, now rocking a median list price of $1,566,500. Either sellers have psychic powers and a hotline to demand forecasts… or they’re blissfully delusional. Given that sold homes since March closed at a median of $1,392,000, the current list-to-sale gap is a whopping 11%. Some homes are fetching close to ask—but many are simply overpriced daydreams.

Median ≠ Market Truth
Let’s remember: “median” just means “middle.” It doesn’t tell you how your particular home is faring. For example, I ran a hyper-specific MLS search for 3-bedroom, detached homes with 2–3 baths in escrow or recently sold. The results? Far less dramatic—and way more representative of the mid-market reality.

What the Smart Money’s Saying
Our local quantitative wizard, Steven Thomas, reports pending sales in OC are on pace with the past two years—not even close to 2022’s crush. Translation: this market is not high on caffeine anymore.

My call? Expect a year more like 2023, when prices wobbled in spring, peaked in August, then got a second wind in November thanks to friendlier rates. If the Fed drops hints of relief and lenders play nice, we might see another off-season spike in sales and prices.

Brace for the Unexpected
But let’s be real. Global economic volatility and Washington’s policy plot twists are rewriting the rules. Investor anxiety over uncertainty could easily redirect capital to real estate—a time-tested “safe harbor.” That’s likely what we’re seeing behind those higher price points in recent sales.

So, What Should You Do?
If you’re a buyer planning a long-term move, stop obsessing over rates. Buy the house. Do the math—if your income supports the debt, go for it. Same for investors.

Sellers? If it’s time to sell, sell. Waiting for the “perfect price” is a dangerous game, especially now. Remember, homes currently in escrow (aka, the ones that actually found buyers) are priced more realistically. Active listings? Many are priced on a wing and a prayer.

There is no clear path forward. Everyone must carefully balance their housing needs versus investment strategy and willingness to potentially weather short term pain. However, as always, over time investing in real estate pays off. Let’s craft your strategy for savvy sales and acquisitions.