Laguna Niguel Real Estate Market Update - February 2024

As Laguna Niguel Realtors, we’re committed to bringing you the most current and comprehensive information on the Laguna Niguel real estate market. Let’s dive into the key statistics shaping the market today, including home sale prices, the number of sales, and the inventory supply of listings.

Here are the latest numbers as of the end-of January 2024. Percentages are year-over-year comparisons with January 2023. 

• Median Home Sale Price: $1,196,000 | +6.3%
• New Listings: 56 | +40.0%
• Active Listings: 82 | -21.2%
• Pending Sales: 33 | 0.0%
• Closed Sales: 31 | -11.4%
• Days on Market: 19 | -60.4%
• Months Supply of Listings: 1.6 | -5.9%

(All data is from the California Regional Multiple Listing Service.)

What insights can we glean from the Laguna Niguel real estate market data above? It all points in the same direction: high demand from homebuyers, with not enough supply of homes on the market for them to buy. We see this manifest in a few ways.

New Listings vs Closed Sales

First, despite a significant rise of 40% MORE new listings compared to January ‘23, there are still 21% FEWER active listings on the market. This means that homes are entering contracts quickly, which is reflected in a median of only 19 days on the market.

Median Sale Price Increasing

We also clearly see the imbalance of demand vs supply in the median sale price, now up more than 6% annually. When more homebuyers are competing for the same limited number of homes for sale, sellers can negotiate higher prices.

Supply is Limited

Conventional real estate wisdom says that supply under 3 months is a seller’s market. In Laguna Niguel, supply has been constrained below that level since fall of 2019, now sitting at about half that (1.6 months). That’s why, despite mortgage rates lingering in the 7% range, the 12-month median sale price in Laguna Niguel continues to climb, now at a record-high of $1,220,000.

Here in Laguna Niguel—and in Orange County and southern California more generally—there are not one but TWO elephants in the real estate room.

The first elephant has been around for a long time: low listing supply. With how many people want to live and own property here, there is a perennial shortage of homes for sale, and it only got worse in the housing boom of 2020.

The second elephant in the room is mortgage rates. Since the Fed started battling inflation in 2022 by raising interest rates—which impacts bond markets and ultimately mortgage rates too—rates have shot up from around 3% to as much as 8% for the prototypical 30-year fixed-rate conventional loan. The big question, then, was: how much will higher borrowing costs impact homebuyer demand?

The answer was: not enough. Yes, higher mortgage rates did cause many homebuyers to slink back to the sidelines; however, it sidelined many home sellers too. This meant that we never saw a big influx of listings without buyers to buy them. Mortgage rate hikes absolutely changed our market, but low supply proved to be the biggest elephant in the room.

Mortgage Rate Update

By now, you might have heard that mortgage rates are falling… or that they are up again? Actually, both are true. Among industry analysts like Fannie Mae and the National Assn. of Homebuilders, the general consensus remains that mortgage rates will fall to 6% by the end of 2024 and into the 5.5% range next year. However, recent jobs and inflation reports being hotter than expected means the Fed may keep rates a bit higher for a bit longer. We’re seeing this already priced into the mortgage market, with rates around 7.1% at the time of this writing.PS. Want accurate and timely mortgage rate info? Mortgage News Daily is a go-to resource. Bookmark this page!