Cost Per Square Foot of New Homes Drops 2.8%

There had to be some good news lurking somewhere on the Orange County housing front.

While all other price-related items in the county’s new detached home market increased in the intervening six months, a study by First American Title Insurance Co. released Monday says the average price per square foot of a new detached home was 2.8% lower in August than it was in March.

It isn’t much, but when all the other numbers are climbing, a drop from an average selling price of $156.17 per square foot this spring to a mere $151.76 by the end of the summer might actually look good to some home shoppers.

If that isn’t enough, the survey by the Santa Ana-based title insurance company shows that the average new detached home price in the county rose only 1.9% since March. It also found that there are quite a few more homes available than just six months ago, and that the rate of appreciation in new homes has slowed considerably in the past year.

In the 85 developments selling new detached homes in the county surveyed by First American, there were 988 units available out of a total of 7,652 built or under construction and the builders were planning to put up 4,900 more units in coming months.

In March, there were only 515 homes available in 52 developments, with only 1,890 more units on the drawing boards.

And the average price of a new detached home in the county rose less than 2% since March and only 6.8% since August, 1988, contrasted with a staggering 60.6% price hike from August, 1987, to August, 1988.

There is a downside, however. As slowly as it has been appreciating, that average new home price is still $397,611--which puts the average-priced new home out of the reach of all but a very few Orange County families.

And the median price of a detached new home in the county--the point at which half the homes are cheaper and half are more expensive--rose 10.7% to $385,000 in the six-month period. That is 74.2% higher than two years ago.

More than 75% of the homes available in August were priced at $300,000 or more, with more than 25% priced at $450,000 or more.

For the average price of nearly $400,000, buyers are getting a 2,620-square-foot detached home on a 6,056-square-foot lot.

The home is most likely done in a two-story Spanish or Mediterranean style. It has an average of 3.7 bedrooms and 2.9 bathrooms, a tile roof, a three-car garage, air conditioning and a $110.60 monthly homeowners association fee to tack onto the monthly mortgage, insurance and property tax payments.

Prices in the August survey ran from a low of $194,990 for a three-bedroom, two-bath, 1,098-square-foot home on a 3,200-square-foot lot in Rancho Santa Margarita to $1.2 million for a six-bedroom, 4 1/2-bath, 5,096-square-foot home on an approximately 10,000-square-foot lot in Laguna Niguel.

ORANGE COUNTY’S NEW HOME PRICES

Aug. 1989 March 1989 Aug. 1988 Average Sales Price $397,611 $390,122 $372,850 Median Sales Price $385,000 $347,600 $354,900 Average Square Feet 2,620 2,498 2,496 Average Price per Square Foot $151.76 $156.17 $149.38 Average Number of Bedrooms 3.7 3.7 3.5 Average Number of Bathrooms 2.9 2.9 2.9

Aug. 1987 Average Sales Price $230,913 Median Sales Price $220,990 Average Square Feet 2,068 Average Price per Square Foot $111.66 Average Number of Bedrooms 3.4 Average Number of Bathrooms 2.6

Source: First American Title Insurance Co.