Highest Median : Orange County Leads Nation in Cost of Homes
Orange County’s superheated housing market led the nation with a median home price of $231,200 in the fourth quarter of 1988, and other Southern California metropolitan areas were close behind, the National Assn. of Realtors reported Tuesday.
It was the third consecutive quarter in which the median price for a resale home in Orange County topped the list of 62 metropolitan areas surveyed by the association.
The county also led the nation in price appreciation during the fourth quarter, with the $231,200 median price representing a 32.2% increase from the final 3 months of 1987.
San Francisco had the nation’s second-highest median home price at $228,100 for the fourth quarter, an annual increase of 29.6%, while the median price in Honolulu ranked third at $225,000, up 16.4%.
Los Angeles County posted the fourth-highest median price at $191,200, up 24.6% for the year. San Diego ranked eighth, with a median resale price of $157,200, up 18.6%. The Riverside-San Bernardino area placed 11th at $113,200, up 16.5%.
Well Above Norm
Home prices in Southern California--and especially in Orange County--have climbed well above the national norm because of the area’s strong economy and its desirability as a place to live.
The Southland economy has been diverse enough, and family incomes high enough, to avoid the regional recessions that have caused the housing market to stagnate in parts of the industrial Northeast and sent prices plummeting in Texas, Oklahoma and Colorado.
The national median for the fourth quarter was $87,900, up a scant 3.4% from the same period a year earlier, the association said.
The survey reflects resales of single-family detached homes and does not include new homes or attached housing such as condos. The median price represents the midpoint, with half the homes selling for more and half for less.
At the other end of the survey, Oklahoma City saw resale prices drop 10.1% to finish in 62nd place with a median of $53,500--less than 25% of the Orange County median for the quarter.
That kind of price differential has been a factor in the slowing of Southern California’s population growth and in the relocation of a number of Southland businesses to less-expensive communities in the Southwestern states.
And if reports from home shoppers in much of Southern California are any indication, housing-price shock syndrome might well become an ailment recognized by the psychiatric community.
Shock at Prices
“Almost every person I’ve had from one of the lower-priced areas who has inquired about housing prices around here has been absolutely shocked,” said Joan Wilson, a sales agent with Grubb & Ellis Real Estate in Mission Viejo.
“Those who didn’t have to move here because they were being transferred mostly decided not to come,” she said.
For Jim and Dianne Kaufman, there was no choice. He’s Lt. James Kaufman, an air traffic control officer in the Marine Corps who was transferred from Memphis, Tenn., to El Toro just a little more than a year ago.
When the couple arrived in Orange County, the median price of a single family home on the resale market was $175,000. There was no way they were going to pay that kind of price, Kaufman said.
After all, the Kaufmans had been living in Memphis, where a very nice house could be had for $50,000 or less, and had grown up in Minnesota, where prices were only slightly higher than those in Tennessee.
“It was a real culture shock,” Kaufman said, “and it has gotten worse.”
For the past year, the Kaufmans have rented in the El Toro area. They originally paid $650 a month for a one-bedroom condominium--comparable to their $250-a-month apartment in Memphis--and later moved up to a two-bedroom condo for $760 per month.
Thinking About Buying
Now, with a year left on his tour at El Toro, Kaufman and his wife have just about decided to buy a place and are making the rounds with agents.
“I cannot believe the prices,” he said. “We’re talking about doubling our monthly costs to buy a condo in the $125,000 to $130,000 range.” It would be virtually impossible to find a detached home in that range.
Although Kaufman said he is likely to be transferred to an overseas post next year, he and his wife are considering buying a home in Orange County at this late date because of the area’s “fantastic” real estate appreciation rates. He said that if they buy, they would either sell for a quick profit when he is transferred or hang on to the property for long-term appreciation.
Nationally, 3.99 million resale homes were sold in 1988, the highest annual total since 1979’s 4.05 million. That was despite rising interest rates over the last year.
While prices in Southern California posted the nation’s biggest appreciation rates, costs in several Northeastern cities--where housing prices remain among the highest in the nation--showed little escalation and in some cases posted declines.
Prices in fifth-ranked Boston, for example, rose only 3% to a median of $182,800.
And in sixth-place metropolitan New York, an area including Long Island and northern New Jersey, the median dipped 3.6% to $178,500.
“In (parts of) the Northeast, prices have basically run away from family income,” said John A. Tuccillo, the National Assn. of Realtors chief economist. “The market is slowing down there until incomes can catch up.”
THE HIGH COST OF HOUSING
Median prices for existing single-family homes based on a survey of 62 metropolitan areas for last quarter of 1988. HIGHEST MEDIAN PRICES 1. Orange County, Calif.: $231,200 2. San Francisco Bay Area: 228,100 3. Honolulu: 225,000 4. Los Angeles area: 191,200 5. Boston: 182,800 6. New York: 178,500 (including New Jersey and Long Island) 7. Hartford, Conn.: 165,000 8. San Diego: 157,200 9. Providence, R.I.: 133,000 10. Washington, D.C.: 129,700 LOWEST MEDIAN PRICES 1. Oklahoma City: $53,500 2. Des Moines, Iowa: 54,800 3. Louisville, Ky.: 55,600 4. Toledo, Ohio: 56,400 5. Lansing, Mich.: 56,700
Sources: National Assn. of Realtors, California Assn. of Realtors
