If you're hoping to buy a distressed property in Orange County, you may be out of luck.  The inventory of foreclosures and short sales is down by half since this time last year

Orange County is seeing the lowest rate of distressed properties for sale since June 2007.  Of the homes for sale in the area, only 15 percent of them are distressed.  At this time last year they represented at 34 percent share of the market

What's behind this shortage?  One leading factor is that banks have a strategy of slowly releasing their inventory of distressed properties.  These properties hit the market at a methodical and pre-planned rate

Of the distressed properties that are on the market, 29 percent are foreclosures being sold by banks, and the remaining 71 percent are short sales.  Currently, there is about two weeks worth of inventory for distressed properties, and compared to non-distressed properties, they sell almost four times faster

Those distressed homes in Orange County may not come as a bargain, either.  7 percent of those listed are over the $1 million mark, while 66 percent are priced are $500,000 or less

Not only are distressed properties for sale few and far between, the market for non-distressed properties is also tight.  There are 73 percent fewer homes for sale in Orange County than there was at the peak of the market in September 2007

Orange County homes have an average market time of 1.41 months.  In contrast, that figure was more than four months just two years ago. That number increases dramatically for homes listed over $1 million, however.  Those pricier homes have a market time of over 5 months, making it almost five times harder to sell a more expensive home.  30 percent of all homes listed in Orange County are listed at $1 million and above

So if you're in the market for a distressed or inexpensive property in Orange County, be prepared for a very competitive market.  In times like these, if you see something you like, you must act fast