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Median Home Price in O.C. Rises 23.7%

The February increase, to $475,000, is the biggest since May 1989 and is propelled by a shortage of houses and condos.

March 17, 2004|Arlene Martinez | Times Staff Writer

Orange County's median home price in February rose 23.7% in the biggest jump in nearly 15 years, with the pace of sales dipping because of a lack of houses and condos on the market, data showed Tuesday.

"These figures ... were much stronger than we anticipated," said John Karevoll, an analyst with DataQuick Information Systems who compiled the data.

The latest numbers, he said, indicate that "the market will stay strong through spring and summer if not longer."

The median price of a new or existing home sold in Orange County last month was $475,000, up from $384,000 a year earlier.

The last time the median home price climbed so sharply was in May 1989, when it increased 24.1%, according to DataQuick.

Condo prices saw the biggest gains, with the median price rising 32.2% to $355,000.

Still, the median price for previously owned single-family houses continued to set the pace for Southern California's housing market, with a 28.4% jump to $520,000 from the previous year. That was a 4% increase from January, when Orange County's houses became the first in any Southern California county to sell at a median price of $500,000.

The median price is the point at which half the homes sold for less and half for more.

Among the factors contributing to the higher prices is the shortage of homes for sale, which is creating intense competition. Potential buyers are eager to snap up property because mortgage rates are low.

"The market's still insane," said Sandra Cervantes, an Irvine-based real estate agent with Century 21 Professionals. "There's a lack of inventory, and until interest rates go up we're not going to see this change."

Last month, 3,248 new and previously owned houses and condos were sold, a 4% drop from the 3,385 homes sold in February 2003.

As soon as homes are put on the market, Cervantes said, sellers are inundated with offers.

"We're seeing crazy things," she said.

Cervantes and her husband recently bid $1 million for a 1,520-square-foot, two-bedroom unit in a not-yet-completed Irvine high-rise. They opted not to take the luxury condo because of its location and are now on the waiting list should a unit on another floor become available.

First-time buyers, Cervantes said, are being priced out of Orange County, heading to communities such as Lake Elsinore, Hemet or Corona in Riverside County, where homes are typically more affordable.

Younger buyers are frequently relying on relatives to help them qualify for financing, she said.

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