Less-Affluent Buyers Spur Downturn : Orange County Home Prices Drop Again in June

Orange County home prices among the highest in the nation dropped in June for the second straight month, a market research firm said Wednesday. The average home cost is $231,303.

But the decline in prices is probably a statistical glitch, according to TRW Real Estate Market Information.

The decline reflects the fact that more people bought lower-priced homes in May and June, rather than a real drop in home prices, the firm said. Those less-affluent buyers were likely lured back into the housing market by lower interest rates, according to TRW.

June’s price dropped 2.2% from the May average of $236,375.

The TRW survey counts all houses and condominiums--both new and used--sold in Orange County.

June’s price was 16.2% higher than a year ago, when the price was $198,980. Last year a buying boom drove prices through the roof. But the boom has cooled off, and sales and price increases have resumed a more normal pace.

“Last year was a hard act to follow,” said John Karevoll of TRW.

The number of homes and condos sold rose 6.8% from May, to 4,167 from 3,903. Sales usually increase each year between May and June as the summer home-buying season gets under way.

However, sales were down a whopping 35% in June from a year ago, when 6,412 homes were sold. That was a one-month record, TRW said.