September 2018 Anaheim Hills Home Values Report North OC
Anaheim Hills real estate sales decreased 38% for a total of 36 closed transactions. Last year this time there were 58 sales. The recent sales included 10 condominium/town homes and 26 single family residences. The median sale price, for all homes sold, increased by 5.4% from the year prior to $770,000.
Condos and town homes represented 28% of all sales in the City. They sold quickly, closing escrow in 25 days. These homes, on average, sold for $500,000 at $418.23 per square foot and featured 2 bedrooms and 2.5 baths with 1,207 square feet of living space.
Single family homes sold possessed 4 bedrooms and 3 baths with 2,293 square feet of living space and 7,600 square foot lots. The properties were in escrow in 29 days for $787,500 at $357.30 per square foot.
Luxury home sales slowed significantly with ZERO sales over $2M. There were 2 estate homes sold with and average sale price of $1.43M. These homes sat on 41,905 square foot lots, with 4,053 square feet of living space, 5 bedrooms & 4 baths. These homes sold quickly, in less than 97 days, for approximately $351.25 per square foot. The North OC Luxury Real Estate market continues to trail the main stream market in the recent recovery. In the past, we have speculated that it will appreciate in 2018 but that may not be the case, despite of some good performance the previous months. Right now, luxury homes are priced low and are, in our opinion, the best deals in Anaheim Hills.
Today, there are 108 homes for sale (Active on the MLS) in Anaheim Hills as follows: 35 condominiums and 73 single family residences, 13 of which are luxury property priced above $1.35M, leaving 60 properties priced within the median range for the City. It is noteworthy to identify that of the 35 Active Luxury homes Active on MLS last month, there are only 13 left on the market despite only 2 closed sales for the period. Luxury home owners pulled these homes from the market due to inactivity and probably frustrations that their homes are not worth what they should be in today’s market.
Based on current demand, the absorption rate (time it will take to sell all units) for condos and townhomes is 81 days. Similarly, the absorption rate for SFR’s is 70 days. Luxury home absorption rate is 195 days. Traditionally, an absorption rate of less than 90 days has signaled a seller’s market in which homes are sold quickly. An absorption rate above 180 days is an indicator of a buyer’s market in which homes are not being sold as fast.
In theory, in today’s market, where the absorption rate for condos, townhomes and SFR’s is below 81 days, most every home currently listed for sale in Anaheim Hills should sell quickly. In practice this is not the case because sellers get to decide upon the list price of their home and less than scrupulous real estate agents say anything to secure a listing telling sellers what they want to hear…. often times overpricing homes by more than 10% of fair market value. In the above scenario, a home will not sell even in today’s sellers market!
Here’s Why Homes Don’t Sell: According to the California Association of Realtors (CAR), if a home is priced at 5% above fair market value (FMV), only 30% of perspective buyers will look at the property. The effects are significantly more catastrophic at higher overpricing scenarios, at 10% above FMV, only 2% of perspective buyers will be reached. So what happens if a home is priced at FMV? Surprisingly, only 60% of buyers will even see a home priced at FMV. Some may ask, when will 100% of perspective buyers see a listing that is within their budget and search criteria? When is a listing appealing to close to 100% of its perspective buyer pool? The answer is when a home is priced 10% below FMV, 98% of its perspective buyers will see this home online. 100% is a bit too optimistic even at 10% below FMV.
Our message to sellers: if your about to list your home, price it right! If your home is in Anaheim Hills and surrounding cities in the North OC and its been on the market more than 60 days, start looking at the price it’s listed at and if it has any major impediments to its sale. Take a hard look at what the comparable recent sales support for homes like it in your tract and lower the price accordingly.
Home inventory is historically low in Anaheim Hills. For Sellers, it’s the ideal time to sell. It’s time to take advantage of the current conditions and make the move they have always dreamed of. We believe that it will remain a strong market through year’s end giving motivated sellers ample time to get to their dream destination. Over the past 90 days, mortgage interest rates have moved up significantly almost .75% and both sellers and buyers need to keep this in mind when pricing homes and timing their market entry.
Nicolaou Real Estate Services remains informed about market trends and forecasts so we can help you make strategic home buying and selling decisions. As residents of North Orange County, we bring our passion for this extraordinary community to every transaction. Our award-winning Realtors® share a commitment to serving you with professionalism, accountability, and uncompromising standards of customer care. It’s always a great time to invest in Orange County! Welcome to our neighborhood!