Why There is Nothing to Buy

Inventory in Southern California is near historic lows and it is not a mystery why. The people who own the homes are not selling them.

Someone who bought in Irvine in 2020 locked in a 3% mortgage. That rate was a generational gift. For context: in 2010 the average was 5%, in 2015 it was 3.85% and by 2019 it had dipped to 3.7%. Yet nothing like 2.9% in 2021. That window lasted about eighteen months. Then rates climbed. By late 2022 they had doubled to 6.7%. By late 2023 they hit 7.08%.

If that 2020 buyer tries to sell and buy something comparable today at 6.37%, their monthly payment goes up about $2,500. Same home, different rate. There is no financial logic that makes that move worth it. So they stay.

Multiply that by millions of households nationwide and you get the market we are in. Not enough listings, not enough choices and prices that refuse to come down even as rates have climbed. The homes are not disappearing. The incentive to sell them is.

What It Means If You are Buying Now

Do not wait for a flood of inventory. It is not coming soon. Sellers will trickle back as life forces the issue: job relocations, divorces, estate sales. That, however, is a slow drip.

New construction and homes built in the last decade are worth looking at seriously in Orange County. Builders are actively incentivizing sales through rate buydowns, closing cost credits and upgrades to move inventory. These incentives can bring your effective rate down from current market rates. On a median Orange County home price of $1.46 million with an 80% loan, negotiating a 0.5 percent rate reduction through builder incentives can save you about $380 a month.

Keep in mind that actual rates depend on your credit profile, loan type, loan-to-value ratio, property type and market conditions. Not all borrowers will qualify and rates, terms and programs change frequently. The savings shown here is an example based on typical scenarios and assumes approval and qualification.

If you want to see what is actually available for your budget and get a personalized rate quote, call or email me. We will start from your numbers and run real scenarios with actual rates.

Rates shown are for illustrative purposes only and are not a commitment to lend. Actual rates depend on credit profile, loan type, property type and market conditions. Not all borrowers will qualify.