County Again Captures U.S. Title for Costliest, Fastest Appreciating Homes

For the second consecutive quarter, Orange County has won the title of the nation’s most expensive and fastest appreciating housing market, according to the National Assn. of Realtors.

The trade group reported Thursday that the median price of resale single-family homes in Orange County was $226,200 in the third quarter, up 32.1% from the year-earlier third quarter.

Both the price and the appreciation rate were the highest of any of the 62 metropolitan areas included in the survey.

But it is unclear whether Orange County’s price supremacy will last through the end of the year. Earlier this week, TRW Real Estate Information Services reported that the average cost of a residence in the county had dipped 3.4% in October.

‘Over the Edge’

Market analyst Ken Agid in Irvine said that the one-month decline may indicate that prices “went up over the edge of a plateau and have fallen back.”

If that is the case, Honolulu could well overtake the county in the next NAR survey--the median price there was only $200 behind Orange County’s.

“The Honolulu market, much more so than most, is heavily influenced by investor buying and vacation homes. In this case the Japanese, who have bought up commercial real estate, are also buying residential property,” said Mark Obrinsky, an economist with the U.S. League of Savings Institutions.

But the supply of housing in Orange County is still woefully short of satisfying the demand, and economists and housing specialists are united in the belief that, despite periodic dips, prices in the county will continue rising for the foreseeable future.

Nationwide, the median home price was just $90,200 for the 3 months ended Sept. 30, while the average 12-month appreciation rate was 3.9%.

The lowest-priced housing market in the county, according to the study, was Des Moines, Iowa, where the median price was $55,000.

While the figures are somewhat dated--the California Assn. of Realtors reported a September median price of $234,934 for resale single-family homes in Orange County--the quarterly study provides the only widely used nationwide comparison of residential housing markets.

Northeast Cools Down

The once-booming Northeast--which had led the nation for nearly 2 years--cooled down considerably in the third quarter, the NAR reported.

But the western region, particularly California, shot ahead, and the so-called Rust Belt states of the industrial Midwest rebounded from several years of sluggish performance.

The oil states of Colorado, Texas and Oklahoma all reported sizable price downturns for the 3 months. Denver led the nation in depreciation, with a median price of $81,100, down 10.9% from the third quarter of 1987.

The NAR study shows that California regions took four of the nation’s top 10 price and appreciation spots in the third quarter. Three of them--Orange County, Los Angeles and San Diego, are in Southern California.

The San Francisco Bay Area was third with a median price of $213,700; the Los Angeles region was fifth at $190,900, and San Diego was eighth at $152,100.

Los Angeles ranked second in price appreciation, with the median up 23.7% from the third quarter of 1987. The San Francisco area was third in appreciation, posting a 21.5% gain for the 12 months, and San Diego was eighth at 15.2%.

The metropolitan Honolulu area was a close second in price behind Orange County, with a median for the quarter of $226,000. But it fell to fourth place in appreciation, with a 12-month jump of 18.6%

Nationally, the Realtors group said the resale pace of condominiums and single-family homes declined a slight 0.7% to a seasonally adjusted annual pace of 4 million units, down from 4.03 million units in the second quarter.

John A. Tuccillo, the trade association’s chief economist, attributed the slight sales decline to an increase in mortgage rates. According to the Federal Home Loan Mortgage Corp., interest charged for fixed-rate mortgages, excluding the add-on fees known as points, averaged 10.5% in the third quarter, up from 10.39% in the second quarter.

Several economists have said that mortgage rates could continue climbing through the first quarter of 1989.

TOP NATIONAL HOUSING MARKETS

In Price

Metropolitan Region: 3rd quarter Median Price Orange County: $226,200 Honolulu: $226,000 San Francisco: $213,700 New York: $192,600 Los Angeles: $190,900 Boston: $184,100 Hartford: $168,800 San Diego: $152,100 Washington: $135,800 Providence: $131,900 TOP NATIONAL HOUSING MARKETS

and Appreciation

Metropolitan Region: Price Increase 3rd Qtr 1987-3rd Qtr 1988 Orange County: 32.1% Los Angeles: 23.7%

San Francisco: 21.5%

Honolulu: 18.6%

Buffalo/Niagara Falls: 17.7%

Seattle/Tacoma: 15.9%

Washington: 15.4%

San Diego: 15.2%

Detroit: 14.0%

Baltimore: 12.7%

Source: National Assn. of Realtors THE BOTTOM OF THE MARKET

In Price

Metropolitan Region: 3rd quarter Median Price Des Moines, Iowa: $55,000 Lansing, Mich.: $57,000 Oklahoma City: $57,900 Grand Rapids, Mich.: $58,700 Toledo, Ohio: $59,900 THE BOTTOM OF THE MARKET

and Depreciation

Metropolitan Region: Price Decrease 3rd Qtr 1987-3rd Qtr 1988 Denver: -10.9%

Baton Rouge, La.: -7.4% Oklahoma City: -5.7% San Antonio, Texas: -5.4% Dallas/Fort Worth: -5.2% Source: National Assn. of Realtors