ORANGE, Calif. — Anthony Evans saw the writing on the wall last November.

As Orange County's housing market slowed to a crawl, Evans had to decide whether to stay in real estate, find another job, or get a second job to keep his family afloat.

What You Need To Know

  • Orange County's housing market has slowed due to low inventory and high mortgage rates

  • According to Mortgage Daily News, as of Wednesday, the average 30-year fixed rate is 7.6% 

  • Five milliion Americans can no longer afford to purchase a home due to high mortgage rates
  • Inventory in Orange County currently sits at around 2,400 homes, 1,200 fewer than last year’s 3,677 homes, according to housing data site Reports on Housing

“I had to get a second job at an HVAC company,” said Evans, a 32-year-old realtor at SoCal Realty Group based in Orange. “I started looking last November. Things were slow in the office. I had closed my last listing and had nothing going on then. I had a friend make a suggestion and this other company wanted me. It’s customer service, and that’s what real estate is. It fits me.”

With rising mortgage rates, low inventory and fewer sellers, Evans is one of many real estate agents having to make that type of decision.

“I have slowly seen a decrease of agents in the industry,” he said. “There was definitely an overpopulation in the past couple of years and now those numbers are dwindling. They were in for the boom and are now in the bust.”

Orange County’s housing market remains slow.

With fewer people listing their homes and many buyers priced out because of high mortgage rates, only a few deals are getting done.

According to housing data site Reports on Housing, inventory in Orange County currently sits at around 2,400 homes, 1,200 fewer than last year’s 3,677 homes. The three-year average before the coronavirus pandemic, 2017 through 2019, was 6,010 listings.

Homeowners, some of whom are sitting on 3% mortgage rates, are just not willing to move in this uncertain time. 

“Homeowners continue to ‘kick back’ in their homes, unwilling to move due to their current underlying, locked-in, low fixed-rate mortgage,” said Stephen Thomas, the chief economist at Reports on Housing, in his latest newsletter.

It’s tough luck for potential buyers, who have seen mortgage rates more than double in the past couple of years.

“Across the country, five million Americans can no longer afford to purchase a home as rates climbed from 7% to 8% in the past few months,” Thomas added. “Until rates fall, fewer buyers can search for a home.”

Melissa Phillips, a realtor at First Team Real Estate, said affordability has become a big issue among her clientele.

“The 8% mortgage rates really scared off a lot of people,” Phillips said.

Phillips had clients looking into buying homes in the $1.2 to $1.3 million range.

But the high mortgage rates now hovering in the 7% to 8% have them looking at homes in the $900,000 and below range. According to Mortgage Daily News, the average 30-year fixed-rate mortgage as of Wednesday is 7.6%. Two years ago, in 2021, it was at 3.14%.

Some of her clients, she said, are just dropping out and waiting to see if rates go down early next year.

“It’s really tough,” she said. “There’s just no inventory out there.”

As a realtor, getting clients has also become more challenging.

“I was slow in June, July and August and then I got super busy from August to October,” she said, adding that networking has kept her afloat.

She said the silver lining is that a home priced right will still get multiple competitive offers.

In one of her latest listings, she said she had 100 groups come through to check out a home during a three-day weekend.

“A really nice property that is priced right will still get multiple offers,” she said.

Evans, who has 14 years of real estate experience serving Santa Ana, Orange and Tustin, is still in the real estate grind.

Evans begins work at his second job from 5 a.m. to 1 p.m. By 1:30 p.m., he’s at the real estate office making calls for prospects and researching the current housing market.

He said he currently has three prospects he’s working with.

Evans’ last closing was in June. Serving as a listing agent for a retired couple moving to Texas, he successfully sold their three-bedroom, two-bathroom home in Brea above its list price of $780,000.

“We had multiple offers and sold for over asking,” he said.

Evans said the past year has been interesting and challenging. As a long-time agent, he’s seen the market fluctuate, but not this much. 

“When I got in 2009, I’ve seen interest rates in the 6% but not in the 7%,” he said. “This was a first for me. It has been a learning experience.”

Seeing the rates climb this high, however, has been to watch.

“It’s painful,” he said of the affordability issue. “We all need to live within our means and work within our budgets.”