County Home Resales Fall 23% From Last Year’s Frenzied Pace

County home resales dropped 23.1% from a year ago but increased 14.6% from July, a realty group’s August figures showed. And the county’s median price of resale homes dropped 0.6% from July’s figure to $247,641 in August.

Compared with last year, when the number of home resales rose to a nine-year high and prices rose furiously, 1989 is a more normal year, the California Assn. of Realtors reported Tuesday.

The trade association excludes new houses, but a separate survey from a Corona consulting firm said county new-home prices dropped during the summer too. The median price of a new house during the third quarter was $350,000, down 5.4% from $369,000 in the second quarter, the Meyers Group said.

Developers--in part spurred by last year’s slow-growth referendum--built so many new homes in the southern part of the county, where most of the new-home construction occurs, that prices dropped.

On the other hand, sales were still exceptionally strong from July to September, with 2,970 new houses and condominiums sold. More homes were sold in just one quarter of 1988’s frenetic market.

Real estate experts said that despite the slowdown in sales, prices are not likely to trend markedly lower. The county housing market, which has been cooling off since late last year, is merely maintaining a more normal pace after last year’s buying binge that pushed county housing prices to among the highest in the nation.

“We’re not going to see prices going up $10,000 a month anytime soon, like they did last year,” said Heidi Gothard of Meyers Group. “But we aren’t going to see any big drops, either.”

The slowdown in home resales in South County also hurt new-home sales, the Meyers Group said.

That is reflected in the slowdown in price appreciation of resale homes. Though still strong, appreciation has tailed off considerably, the realty group said.

In July, the revised median price of resale homes in the county was $249,060. In August, the median-priced resale home in the county cost $247,641, which is a 17.7% jump over the $210,394 of August, 1988.

For all of 1988, resale homes sold for an average of 24.9% higher than in 1987. This year’s percentage is almost certain to be quite a bit less.

Coastal Sales Slowing

That is not just a county phenomenon. Up and down the California coast, home sales have been slowing in high-priced coastal markets. But lower interest rates have kept less-affluent buyers in the market in inland areas and actually boosted sales a little statewide.

Overall, home prices rose 15% across the state in August, compared with a year ago, the lowest monthly year-to-year gain in more than a year.

“A slower rate of home-price appreciation during the past three months reflects the transition to a more stable market,” said Leslie Appleton-Young, vice president of the realty group’s research and economics department. “Home price increases are expected to moderate as sales activity slows.”

Still, August was a strong month for home resales in the county, compared to July, with a 14.6% increase.

On the new-home side, sales were flat compared to the third quarter of 1988: 2,970 new houses and condos were sold this quarter, and 2,901 were sold last year.

Far Fewer on Market

The difference? Last year there were far fewer houses on the market. When the quarter finished last year, just 497 new houses and condos were left in builders’ inventories. This year, there were 1,781, as construction picked up.

Of the new homes sold this quarter, 1,239 were attached residences such as condos and townhouses. The median price was $173,000, up 17% from $147,900 last year.

For houses, sales totaled 1,731, and the price rose 11.8% from $313,000 last year to $350,000 this year.

MEDIAN RESALE HOME PRICES

% Change % from Region Aug. 1989 Aug. 1988 Increase July 89 Orange County $247,641 $210,394 +17.7 -0.6 Los Angeles $229,618 $190,026 +20.8 +2.3 San Francisco $272,016 $221,159 +23.0 +0.8 San Diego $182,476 $152,147 +19.9 +3.8 Sacramento $116,967 $101,583 +15.1 +0.7 Riverside/San Bernardino $129,111 $106,533 +21.2 +2.2 Ventura $269,711 $214,146 +25.9 +6.9 California Average $201,028 $174,750 +15.0 -0.8

Source: California Assn. of Realtors