Housing Sales Slowing, TRW Study Indicates

In the first hard evidence that the long-expected slowdown in Orange County housing sales has finally arrived, TRW Real Estate Information Services said Wednesday that sales activity for February was at the lowest level in nearly two years.

Only 3,087 homes were sold in the county last month, down 2% from the 3,151 sales reported in February, 1989.

At the same time, the average price of homes sold last month was up 4.4% to $252,350 from $241,763 a year earlier.

On a month-to-month basis, February’s average price was down a scant 0.5% from $253,568 in January, while sales for the month were down 4.5% from 3,231 in January, TRW said.

The TRW statistics track recorded sales of all types of single family housing--new, resale, attached and detached.

A spokesman for the Colton-based research firm said new homes accounted for 420 sales in February, or 13.6% of total. That compares to 593 new home sales in February, 1989.

Home resales in February numbered 2,667 units, up from 2,558 a year earlier.

The statistics underscore both an overall slowing of sales and a specific problem in the new housing market, according to William Bereczky, a real estate consultant with the Newport Beach office of Kenneth Leventhal & Co.

New home builders overestimated demand last year, he said, and ended 1989 with a sizable overstock, many in the higher-price ranges. Higher interest rates and other economic concerns have put a lid on the nearly frenzied home-buying that occurred in 1988 and most of 1989.

A recent Leventhal study of new home inventories, Bereczky said, showed an unsold inventory at the end of 1989 of 1,344 single-family detached homes and 756 attached units, contrasted with a figure of 323 detached and 199 attached units at the end of 1988.

“Builders overshot in estimating the market,” he said.

HOUSING MARKETS IN ORANGE COUNTY

AVERAGE HOME PRICE

Average sale price for new and resale houses and condominiums: 1988: $188,346 1990: $252,350

MONTHLY HOME SALES

Total sales of new and resale houses and condominiums: 1988: 3,445 1990: 3,087

Source: TRW