Median Price of Home in Orange County Tops U.S.
The cornerstone of the American dream--the traditional single-family house--now costs more in Orange County than any other area in the nation.
With a median home price of $204,000, Orange County surpassed Honolulu and New York to become the most expensive housing market, according to a study released Thursday. The ranking, which measured prices in the second quarter of the year, marked the first time that the county landed the top spot in the study by the National Assn. of Realtors.
The ranking comes after a year of frenzied buying in Orange County that pushed prices up 20%, the biggest jump in the nation for the 12 months ended in June.
“Orange County is almost another country,” said Ken Agid, a consultant to home builders at The Marketing Department, a consulting firm for home builders in Irvine.
Honolulu ranked second nationally during the quarter with a median price of $198,700, falling from its previous first-place perch. San Francisco ranked third at $196,300; the New York metropolitan area, previously second, ranked fourth at $191,900; Boston was fifth at $182,900; Los Angeles was sixth at $175,600, and San Diego was eighth at $142,500.
A median price is the level at which half the homes sold for more and half sold for less. The study by the National Assn. of Realtors excludes newly built homes that were just put on the market. It also excludes condominiums and co-ops.
Orange County has been near the top of the list for the last few years. A sprawling suburb without a metropolitan center, the county was a cheaper alternative to Los Angeles’ more expensive housing through much of the 1960s.
In the 1970s, the economy took off on the strength of dozens of high-technology companies that moved into or started up in the county, creating an enormous demand for housing.
The story has been similar in California’s other urban areas. Four of the 10 most expensive housing markets are in California, the trade association said. Higher home prices in the top-10 markets are spreading to nearby areas. The Riverside and San Bernardino area, where Orange County residents have been moving in search of less expensive housing, ranked as the 12th-most expensive market with a median price of $104,600.
Prices have been jumping in the state much faster than the national average. After Orange County, Los Angeles ranked second in the nation in terms of price increases, with a 19% jump. San Francisco stood at third, with home prices appreciating at a 15.5% annual rate.
That means few people can afford the average house in these areas, only about 25% of California households and only 20% in Orange County.
Restrict Number
“These kind of prices severely restrict the number of people who can afford a house,” said Joel Singer, chief economist for the California Assn. of Realtors. “Because of that, we’ll probably see a bit of a slowdown in sales and price increases for the rest of the year.”
In Orange County, even $204,000 does not buy much of a house, real estate agents said. The house is likely to be small, in need of repair and located in an older neighborhood.
The story is much the same in Honolulu, where a scarcity of developable land made it the nation’s most expensive market for single-family houses in the first quarter of the year.
The median price of $198,700 gets a buyer “pretty much a modest box,” said Mike McCormack, president of the Honolulu real estate brokerage firm of Coldwell Banker McCormack, “and in a suburb pretty far from town.”
The New York City housing market, which includes parts of Connecticut and New Jersey, also does not offer much for $200,000.
‘Real Bargain’
“The Northeast was a real bargain before the early 1980s,” said Stephen Sutherlen, chief operating officer for Coldwell Banker on Long Island. “Then prices shot up while West Coast prices were stalled, and now our prices are slowing down again while yours are jumping. So the two coasts stay pretty much in parity.”
That is in contrast to Louisville, Ky.--the lowest-priced of the trade association’s list of 62 metropolitan areas--where the median price is $54,600, but $200,000 gets you a big house in some old-money suburbs.
“And we’re not talking a slouch house either,” said Al Ring, manager of a Century 21 office in Louisville in a telephone interview.
Typically, a $200,000 house in those suburbs would total four bedrooms, two-and-a-half baths and a two-car garage on a big lot with plenty of trees, Ring said.
Meantime, residents of Orange County and other California urban areas despair. Many have elected to stay in apartments because they cannot afford to buy and they do not want to move out of the area.
Battered Economy
Ora Fife, a veterinarian, moved to a two-bedroom townhouse two years ago from the battered economy of Shreveport, La. She has not been able to sell her house in Shreveport and remains a frustrated renter.
“I’ve owned a house for a long time,” she said. “But people have more money here, and that’s driving prices up.
“I’m not surprised, but it’s a frustrating situation.”
HOME PRICES IN METROPOLITAN AREAS
%CHANGE AREA AND RANK $1,000s FROM YEAR AGO 1. Orange County (Anaheim/Santa Ana) 204.0 20.1 2. Honolulu 198.7 8.6 3. San Francisco 196.3 15.5 4. New York/N. New Jersey/Long Island 191.9 4.9 5. Boston 182.9 3.8 6. Los Angeles 175.6 19.1 7. Hartford 169.0 7.6 8. San Diego 142.5 12.1 9. Washington 131.6 14.4 10. Providence 130.4 8.9 11. W. Palm Beach/Boca Raton/Delray Beach 108.6 4.1 12. Riverside/San Bernardino 104.6 6.4 13. Chicago 99.3 9.2 14. Philadelphia 97.6 6.0 15. Seattle/Tacoma 93.6 11.2 16. Albany/Schenectady/Troy, N.Y. 89.3 3.2 17. Baltimore 87.3 13.7 18. Dallas/Ft. Worth 85.5 -5.0 19. Minneapolis/St. Paul 84.3 5.1 20. Denver 83.5 -5.3 20. Miami/Hialeah 83.5 -1.1
Source: National Assn. of Realtors
