After years of talking about inventory scarcity in Orange County, I'm finally seeing relief. Homes are staying on the market longer, which means buyers have more choice and appraisers have better comparable data.
The Inventory Shortage Explained
2021-2022 was brutal for buyers. Homes listed on a Tuesday were sold by Thursday. Bidding wars pushed prices 10-20% above asking. For appraisers, it was chaos—every home had multiple offers and wildly inflated prices.
The underlying cause: low inventory. Homeowners with 2-3% mortgages had zero incentive to sell. Rates jumped to 7%, so no one moved.
Inventory collapsed because supply was artificially constrained.
What's Changed
In the last 90 days, I've appraised 71 homes across Orange County. The number of properties actively for sale has increased. Days-on-market has increased. Price reductions are more common.
This is actually healthy. More inventory means:
- Buyers have choices (instead of bidding wars)
- Prices settle at market-driven levels (not panic-driven highs)
- Appraisals are easier (more comparable sales data)
- Transactions move more smoothly (less desperation)
Where Inventory Is Growing
Huntington Beach, Long Beach, and Costa Mesa are seeing more inventory than a year ago. Not a flood, but meaningful increase.
Inland areas (Irvine, Riverside County) have more new construction listings, which adds supply.
Beach communities and premium neighborhoods are still tight, but even those are seeing slightly more availability.
Why Inventory Is Still Constrained
Before you think we're back to normal: We're not. Inventory is improved, not abundant.
The reason: Homeowners are still underwater on the rate calculation. Your 2.9% mortgage is too good to walk away from. So you only sell if you absolutely have to (divorce, job change, health issue).
Inventory growth is slow because it's being driven by forced sales, not voluntary moves.
Appraisal Implications
More inventory means more recent comparable sales. More recent sales mean better appraisal data.
I'm doing appraisals now where I can find 5-6 truly comparable sales in the last 60 days. A year ago, finding 3 comparable sales was a victory.
That better data makes my appraisals more defensible and more likely to match sales prices.
Price Implications
With more inventory, buyers can be more selective. They're not forced to accept the first home they see and overpay because of competition.
I'm seeing more homes appraise very close to sales prices, versus homes that appraised well below asking (early 2023) or well above appraisals (2022).
The market is normalizing. Gradually, but noticeably.
What This Means for Your Plans
If you've been waiting to buy because you didn't want to compete in a bidding war, conditions are better now. Not perfect, but better.
If you've been thinking about selling, inventory improvement means you might not get pre-pandemic prices, but you'll get clearer market pricing without desperation.
If you're refinancing, appraisal data is better because comparable sales are more plentiful.
The Supply Wildcard
Here's the thing nobody's talking about: If rates drop 0.5% or more, we could see a rush of sellers (homeowners trying to avoid missing out). That would flood inventory temporarily.
But that's a "if." Right now, gradual improvement is what we're seeing, and it's helping.
Summer 2024 Snapshot
July 2024 Orange County market: More homes on the market than June, more inventory than July 2023, fewer desperate buyers, more realistic pricing.
Not a crisis, not a boom. Balanced.
That's what a healthy market looks like.