Honolulu Tops Resale Home Prices in O.C.

Those who think the prices of single-family homes in Orange County are getting out of hand can at least be thankful that this isn’t Honolulu.

While the median price of a resale home in Orange County hit $247,900 in the last quarter of 1989, it soared to $280,900 on and around the golden sands of Waikiki, the National Assn. of Realtors reported Wednesday.

And for the real estate investor who is heavily into appreciation, Honolulu and at least 15 other cities were better places to be.

That’s because Orange County’s median resale home price--third highest in the nation--was only 9.5% higher than the median price for the fourth quarter of 1988, the realtors group said.

In Honolulu, the appreciation rate was 24.8%.

And in Seattle, where the median Orange County resale price would cover two homes and more, the appreciation rate from the fourth quarter of 1988 through the last three months of 1989 was 25.2%.

The Seattle housing market has been driven largely by migration, much of it by Southern Californians seeking real estate bargains in which to pump the equity from their fast-appreciating Southland properties.

Other areas in which the soaring price of resale, single-family homes outpaced Orange County included Sacramento, up 24%; Akron, Ohio, up 19.3%, and Portland, Ore., up 12.5%

Even in Buffalo, N.Y., which is usually buried in snow by the end of December, price appreciation outperformed Orange County. The median resale price of $75,700 in Buffalo was up 13.7%

That’s not to say that housing appreciation in Orange County has been below par.

The realtor-group survey looked at resales of single-family homes, excluding condominiums, in 83 metropolitan areas of the country and 67 of them had lower appreciation rates than Orange County. In eight cities--mainly in the Northeast or in areas whose economy has slumped because of depressed oil prices--the median resale home price actually dropped.

By comparison, a 9.7% appreciation rate is pretty good, said John Tuccillo, chief economist for the national realtor group.

What has kept prices in Orange County from rising even more than they have, he said, is the Inland Empire safety valve.

“In Honolulu, there is no place else to go, so you have 25% appreciation,” Tuccillo said. “In Orange County, while people still want to live there, they can go to Riverside or San Bernardino if prices get too high.”

And that, housing industry analysts say, is exactly what has been happening.

New home sales in Orange County in the fourth quarter were down 12.1% from the last three months of 1988, according to a report recently compiled by Market Profiles, a Costa Mesa consulting firm.

And resales during the same period were down 24%, the California Assn. of Realtors reported late last month.

“The same sort of thing is happening in San Francisco and, to some extent, in Los Angeles,” Tuccillo said.

San Francisco had the nation’s second-highest median resale home price for the fourth quarter, at $260,600, the realty group said.

Appreciation in San Francisco, however, was 12.1%--quite healthy but far below the rate in Honolulu, where Japanese seeking second homes or foreign investment opportunities have been flooding the market for nearly two years.

THE NATIONAL MARKET FOR RESALE HOMES

Orange County posted the third highest median price in the nation for resale single family homes in the fourth quarter of 1989, the National Association of Realtors reported. The median price in the United States was $92,800, up 4.6% from the previous year.

MEDIAN PRICES

HIGHEST

% Change from ’88 Area Price 4th Qtr. Honolulu $280,900 24.8 San Francisco 260,600 12.1 Orange County 247,900 9.5 Los Angeles 217,000 13.6 Boston 183,600 2.4 New York 180,000 0.1 San Diego 178,700 13.7 Hartford 164,200 - 0.5 New Haven 163,500 2.1 Washington 145,600 11.9

LOWEST

% Change from ’88 Area Price 4th Qtr. Peoria $47,200 6.5 Spokane 53,900 7.2 Oklahoma City 53,900 0.7 Mobile 56,400 1.1 Louisville 58,000 5.3 Des Moines 59,600 8.8 Wichita 59,700 0.2 Omaha 60,200 0.5 Lansing 60,400 7.5 Toledo 60,400 7.1

APPRECIATION

When it came to appreciation, however, Orange County didn’t make the top 10.

MOST

% Change from ’88 Area Price 4th Qtr. Seattle $115,100 25.2 Honolulu 280,900 24.8 Sacramento 120,800 24.0 Akron 69,700 19.3 Buffalo 75,700 13.7 Los Angeles 217,000 13.6 Grand Rapids 67,200 13.5 Riverside/San 128,100 13.2 Bernardino Portland, Or. 72,900 12.5 San Francisco 260,600 12.1

LEAST

% Change from ’88 Area Price 4th Qtr. Tulsa $62,000 - 5.1 Providence 128,400 - 3.5 Corpus Christi 64,500 - 3.0 Phoenix 77,500 - 2.6 Jacksonville 66,300 - 2.4 Worcester 139,700 - 2.4 Baton Rouge 64,300 - 0.8 Hartford 164,200 - 0.5 New York 180,000 0.1 Wichita 59,700 0.2