Price for New Home in South Orange County Averages $329,214
The average price of a new house in the southern half of Orange County soared to $329,214 in the third quarter, an astonishing 55% increase in just one year, according to a report released Friday by housing consultant Market Profiles.
While builders sold about the same number of houses through September as they did during the same 9 months in 1987, those houses sold a lot faster this year, most of them as soon as they hit the market.
Now, however, there are signs the frenzy is abating, said S. Kelly McDermott, a vice president at the Costa Mesa consulting firm.
“There are a lot of people in the industry who feel we’ve either topped out or are close to topping out,” she said.
But since home sales normally slow in the fall, “we really won’t be able to tell until the first quarter of next year, when we can see if the buying hysteria starts up again,” she said.
Only a Few Left
The number of new houses sold didn’t change much from last year to this year, largely because there simply weren’t more houses to sell: Developers couldn’t build them fast enough to meet the demand. In both years only a few new homes were left at the end of each quarter, according to Market Profile’s quarterly report.
Much the same thing happened in the market for resale houses, with low supply and big demand pushing prices to a point where they now rank as the highest in the nation. A report released Thursday by the National Assn. of Realtors said the median priced resale home in Orange County cost $226,200 in the third quarter, up 32.1% from a year ago.
If you were trying to buy a new house in the southern half of Orange County this summer, you don’t need to be told there wasn’t a whole lot left after a horde of buyers descended on the 90 housing developments there.
Here are the numbers, according to Market Profiles: By the end of the third quarter, only 138 new single-family houses were left on the market after builders sold 1,402.
And only 115 condominiums were left after 840 condos were sold.
The figures provide a snapshot of a market with only a tiny choice of homes available at very high prices.
The small inventory and high prices helped push down the number of homes sold during the summer, contrasted with the spring, and kept it about even with the number sold in the summer of 1987.
Mostly because there just weren’t enough condominiums to meet the demand, total housing sales fell 10% from the spring number.
The price of a single-family home averaged $329,214 during the third quarter, which ended Oct. 1. Condos averaged $181,657, Market Profiles reported.
The price of a condo jumped 32% from last year’s average of $137,799. But new homes jumped an even steeper 55% from $211,763 last year.
Sales Shot Up
Meanwhile, in the more heavily developed northern half of the county, builders put up more new houses during the summer than they did in the spring, and home sales shot up correspondingly.
While small contrasted with the number of homes built in the comparatively underdeveloped south county, homes sold in the northern half of the county during the summer still totaled 916, up 30.5%. The vast majority were single-family homes.
Prices in the north were even higher than those in the south. Single-family homes averaged $343,761, and condos averaged $203,209.
For condos, that was a jump of 51% from the average $134,974 average price last year. For houses, it was a jump of 54% from $223,789 last year.
Builders, who have also been squeezed by high land costs, keep jacking up their prices. Still, the demand did not slacken until recently.
Where’s the Top?
“In the last year and a half, the builders keep wondering where the top of the market is, and yet every time they raised their prices, people were still lined up to buy a house,” said McDermott.
“Nobody had a feeling for how much income there was out there; it was sort of an invisible market.”
If demand is slackening, it will be just in time, because Market Profiles counts far fewer housing units up before local governments awaiting approval for construction.
In the first quarter of this year, builders had asked permission to build 33,000 units in south county and 6,500 in north county.
By the third quarter, builders in the north county were asking for even more units, 8,400. But in the south county, the number of units awaiting permission had fallen to 28,000.
NEW HOUSING ACTIVITY IN ORANGE COUNTY
3rd Qtr. 3rd Qtr. 1988 1987 NORTH COUNTY Number of Developments Detached 19 21 Attached 10 18 Total 29 39 Sales Detached 695 451 Attached 221 213 Total 916 664 Average Price Detached $343,761 $223,789 Attached $203,209 $134,974 Overall $309,851 $195,299 SOUTH COUNTY Number of Developments Detached 52 66 Attached 37 51 Total 89 117 Sales Detached 1402 1165 Attached 840 977 Total 2242 2142 Average Price Detached $329,214 $211,763 Attached $181,657 $137,799 Overall $273,930 $178,026
Source: Market Profiles
