Low inventory of homes, pent-up demand create ‘extreme’ seller’s market in Orange

In Orange County’s hot residential real estate market, multiple offers are commonplace and often come in well above the asking price.

Valerie Torelli, founder of Costa Mesa’s Torelli Realty, recently represented a buyer who made one of 48 offers, according to the home’s listing agent, Fred Sed of Keller Williams, Irvine.

Torelli recalled a weekend earlier this month when a house on Magnolia Street in eastside Costa Mesa drew “54 showing appointments in 15-minute increments where clients and agents stood in line. The house was listed at $999,900, and sold for $1.375 [million] within three weeks of listing.”

With no open houses allowed because of pandemic restrictions, the only way to physically view a property is to first make an appointment online.

Torelli, who has been in the real estate business since the early 1980s, has seen cyclical ups and downs over the years. But she said she has never seen so little inventory and such a skewed market with prices rising exponentially since the end of January.

“People weren’t moving during COVID-19, which created a bottleneck [of buyer demand],” Torelli said. “People didn’t put homes on the market and they’re still not moving, including a lot of seniors who are staying put and remodeling.”

Torelli’s clients have told her their homes have become their sanctuaries, something they never thought about until now. They spend more time in the kitchen and are enjoying cooking. Many have decided to work with what they have and started remodeling.

“The low interest rate on refinancing enables remodels,” said Torelli. “It’s incredible. They put $150 to $200K into a home, and several in the Mesa Verde tract have been torn right down to the ground [for remodeling work]. Money is cheap, people aren’t moving.”

Torelli sees the hot real estate market continuing “as long as there’s low inventory and low interest rates,” she said. “With interest rates below 3%, lack of inventory, buyers wanting to have their own homes and the family unit becoming more imperative during pandemic.”

Brian Gibney, president of the Newport Beach Assn. of Realtors and associate broker agent for Villa Real Estate agreed that the lack of inventory and low interest rates are driving an “extreme” seller’s market that hasn’t been seen in a long time.

Realtor Brian Gibney sold 1602 Myrtlewood Street over asking price in 17 days, with 20 offers. Photo taken April 26, 2021.

Brian Gibney, president of the Newport Beach Board of Realtors, sold 1602 Myrtlewood St. in 17 days. It brought in 20 offers and sold for $150,000 over asking price. Photo taken April 26, 2021.

(Brian Gibney)

“Who would have thought after what we’ve been through, with the shutdown, that the market came back even stronger despite no open houses?” said Gibney.

He explained that sellers taking advantage of the sky high prices and getting top dollar are often remote workers who don’t need to be in an office. Many are moving to other states such as Texas, Oregon or Colorado. The buyers, he…

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