Prices of New Homes Continue to Rise but Total Sales Decline

The median price of a new house in Orange County hit $320,990 during the first 3 months of the year.

That was up 43% from a year ago, when the price was $224,900, said the Meyers Group, a consulting firm that tracks the county’s housing market.

Condominiums and townhouses also rose steeply, up 44% from $133,900 to $192,900.

But total home sales dropped sharply from a year ago, the firm said. During the first quarter of 1988, when a buying frenzy began, builders sold 2,630 houses and condos.

This year they sold only 2,096, or 20% fewer.

High prices are “stifling the urge to enter the market,” the firm said Friday.

Most experts expect this year to be a much more normal year than 1988 for housing sales and price increases.

That is also the Meyers Group’s view, said Vice President W. Steven Johnson. High interest rates and a lack of land suitable for building in the county will mean that sales and price increases will probably be slower this year, he said.

Builders are constructing fewer homes and have fewer plans before local planning departments, Johnson said.

Sales of condos and houses rose 4% this quarter compared to the last 3 months of 1988, when builders sold 2,021 units. Sales normally increase in the first quarter of the year after a seasonal slowdown the previous fall.

The first quarter’s median price for houses rose 9% from the fourth quarter of 1988, when the median was $293,500.

The price of condominiums and townhouses rose a much sharper 16% from last fall, when the median price was $166,900. Less expensive housing, such as condos, is selling better than the most expensive houses, Johnson said.

“We’re seeing a softening in the top end of the housing market because the prices are so high,” he said.

At that top end of the price scale for houses, the highest-priced house during the quarter in Orange County was $810,000. For attached housing it was $587,500.

On the other hand, the lowest-priced condo started at $79,500 for 546 square feet of space. For houses, the lowest price was $159,900, which got a buyer 950 square feet, the Meyers Group reported.