Steep Prices Hold Down July Home Sales in O.C.
Orange County bucked the statewide trend as sales of existing homes in the county dropped in July. Despite the sales slowdown, prices continued to march upward in the county and statewide.
Existing-home sales in Orange County fell an estimated 12.8% from June, the California Assn. of Realtors said Tuesday. Sales in July were down 27.5% for the month from a year ago.
Statewide, housing activity was stronger with existing home sales increasing 0.9% in July, the trade association said. The reason: Mortgage rates have been dropping slightly since May. Still, sales in California last month were down 14.8% compared to July, 1988.
The trade association said the sales decline in Orange County was linked to high prices. Orange County is one of the nation’s most expensive markets for single-family houses, with a median price of $255,897 in July, up 1.7% from June’s $251,674.
The prices in the county are up 19.5%--more than $40,000--from a year ago, when the median price was $214,227. The median is the point at which half the homes sold were priced above that level and half below.
“The problem is home prices in desirable, hot areas of the state like Orange County,” said Leslie Appleton-Young, vice president for research and economics at the trade association. “Those areas were seeing 20% to 30% appreciation in prices from year to year. You need a fairly significant drop in mortgage rates to offset that.”
The trade association credited slightly lower mortgage rates, which began dropping in May, for July’s slight uptick statewide in home sales. Those lower rates began showing up in mortgages closed in July, when the effective rate fell for the first time in nine months. It was 10.59% in June and 10.39% in July, according to the Federal Home Loan Bank Board.
With the slowdown in home sales in recent months, the inventory of unsold houses on the market statewide has gradually increased. As of July, it would take 7.1 months to sell them all at the present sales rate. That was up from 5.8 months in May and 4.1 months in July, 1988.
After a strong first quarter, home sales began slowing in the April to June period. The trade association expects sales in the second half of the year to continue slowing, said Appleton-Young.
The most expensive market in the state is San Francisco, where the median price was $269,982 in July, up 26.2% from last year’s $214,016. The statewide median sales price was $202,650 in July, up 16.2% from $174,388 in July, 1988.
After San Francisco and Orange County, the state’s most expensive markets for houses were the Ventura County region, where the median price was $252,451, up 22.9% from last year’s $205,494. The Los Angeles area was fourth: The median price was $224,456, up 20.6% $186,133 a year ago.
MEDIAN HOME PRICES IN CALIFORNIA
% Change % from Region July 1989 July 1988 Increase June 89 Orange County $255,897 $214,227 19.5 1.7 Los Angeles 224,456 186,133 20.6 1.0 San Francisco 269,982 214,016 26.2 0.4 San Diego 175,794 150,000 17.2 -1.1 Sacramento 116,194 99,365 16.9 3.9 Riverside/San Bernardino 126,372 108,392 16.6 2.2 Ventura 252,451 205,494 22.9 1.5 California Average 202,650 174,388 16.2 1.1
Source: California Assn. of Realtors
