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Housing Recovery Continues

Real estate: Volume reaches highest point since 1989, and prices are up. Median cost of an O.C. home in August was $203,000.

September 10, 1997|MELINDA FULMER | SPECIAL TO THE TIMES

Orange County's fledgling housing recovery showed no signs of slowing last month, as home prices continued to climb and sales reached their highest point in nearly eight years, a real estate data firm said Tuesday.

The median Orange County home sold for $203,000 in August, the highest price in nearly three years, according to DataQuick Information Services.

"The real estate market has lagged behind the general economic recovery. Now it's finally beginning to catch up," said John Karevoll, DataQuick analyst. "And there's every indication that this level of activity is sustainable."

Realtors say a booming economy had already given buyers more confidence, but rising prices and low interest rates are pushing them off the fence.

Still, this is far from the frenzied market of the late 1980s, when agents received multiple offers on houses and buyers bid up prices significantly.

"Business is good, but we are a long way from where we were before," said Richard Yates, a real estate agent with Coldwell Banker in Mission Viejo.

A total of 3,989 homes sold in Orange County in August, the largest volume for any month since October 1989. Sales were 17.7% higher than in the same month last year. The $203,000 median sales price last month was 3.6% higher than a year ago, and was up from the $199,000 in July.

Resale homes showed the biggest gains in price, jumping nearly 8.9% to $220,000 from $202,000 in August 1996. The number of resale transactions also shot up 19.2% in August to 2,658 from 2,229 the same period last year.

"There's a lot of built-up demand," said Pat Neal, a Huntington Beach real estate broker. "Homes that used to be on the market 120 to 150 days last year are now on the market for 40."

Many first-time home buyers are entering the market, analysts say. Low interest rates and lending programs with smaller down payments are helping them take the plunge.

Through the end of August and early September 30-year fixed-rate mortgages averaged 7.35% with fees totaling 2 percentage points, according to Mortgage News Co. in Morro Bay. In April, these mortgages averaged 7.96%.

Karevoll, the DataQuick analyst, said that many homeowners who have little equity will begin to make moves they had previously put on hold. For instance, residents might move from central Orange County to south Orange County to be closer to a job, or families might trade up to a bigger house.

"Before, they would have to bring money to the table to sell their home," he said.

The condominium market showed signs of emerging from a prolonged slump.

Condo resales increased 36.1% to 799 from 587 in August 1996. Prices also began to turn around, increasing 1.6% to $129,000 from $127,000 last year.

The only declines for the month occurred in new home prices and sales.

New home prices dipped 7.8% to a median of $226,000 from $245,000 a year ago, while 532 homes sold, down 7.3% from 574 sales.

Builders said sales are up substantially at individual communities, but that there are fewer communities open now.

"There's been a reduction in the number of actively selling projects," said Dennis Cullumber, Orange County division president of Greystone Homes.

"The newer projects out there are high density and lower priced," Cullumber added. "That's having a big impact on the overall price."

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Orange County Home Sales

August home sales in Orange County totaled 3,989, a 17.7% increase from a year ago and the highest monthly sales total since October 1989. The median price jumped 3.6% to $203,000, the highest since December 1994. Sales and median prices for new and resale homes and condominiums, by ZIP Code:

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