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O.C. BUSINESS PLUS

Many in O.C. Found a Home in Stock Market

Real estate: One-fifth of county's buyers got help from Wall Street, study finds. Some are converting equity into shares.

March 29, 2000|DARYL STRICKLAND | TIMES STAFF WRITER

One in five home buyers in Orange County tapped into the stock market to finance their purchases in the fourth quarter, reflecting the stock market's growing influence in the housing industry, according to a new survey.

The study, released Tuesday by the California Assn. of Realtors, demonstrates the tangible benefits of the booming stock market but also the economy's greater exposure and vulnerability to Wall Street.

What's more, the study suggested that some homeowners are plowing their equity from appreciating homes into the stock market.

The fourth-quarter survey by the Realtors group updated similar studies during the first half of last year, which showed less than 14% of the home buyers in Orange County had used stock market proceeds for down payments.

Even with 20% of Orange County home buyers last quarter using stock proceeds, analysts suggested that reliance on the stock market could continue to get stronger.

The percentage of Orange County home buyers using stock proceeds, including their 401(k) savings plans, exceeded other areas of the Southland and the statewide average of 14% statewide in the fourth quarter.

But predictably, a greater share of homeowners in Northern California--24% by the latest survey--converted stocks to help finance their home purchases.

"People are saying, 'My financial portfolio is fine, but now I want a real asset,' " said Leslie Appleton-Young, chief economist of the realty group.

Indeed, people may be making the move to diversify their assets as the stock market has soared to new peaks, generating a tremendous amount of new wealth during a record long economic expansion.

Homes in Orange County, and throughout most metropolitan areas across the state, have risen to record heights. In Orange County, a typical single-family house is $306,150; the statewide median price is $231,710.

The survey was based on responses from more than 500 brokers, who usually learn about a buyer's source of income while helping them find homes and financing. The latest survey completes the first year that the stock market's specific role in housing has been measured.

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