Home Resales Up in O.C., Down in Rest of Southland
Sales of existing homes in California increased 8.2% in February from the previous month to the highest level in 10 months, as buyers decided to jump into the market to beat further rises in interest rates, the California Assn. of Realtors said Monday.
In Southern California, however, only Orange County, of all the major residential markets, showed an increase in resale activity.
Sales in the Los Angeles, San Diego and Riverside-San Bernardino used-home markets slowed.
The apparent anomaly of Orange County outperforming the fast-growing Riverside-San Bernardino area is a factor, industry analysts said, of the county’s high-priced new homes.
Resale homes do better in Orange County than in other areas because they are more affordable than new units, while new homes are priced low enough in other areas to keep sales rates ahead of those in the used-home market.
Still, when all types of homes are grouped together, February sales were down in Orange County as well.
TRW Real Estate Information Services reported earlier that sales of new and used homes and condominiums in Southern California fell during February to their lowest point since January, 1988. Only 19,558 housing units changed hands last month in Los Angeles, Orange, San Diego, Riverside and San Bernardino counties on a non-seasonally adjusted basis, 7% lower than January’s total and 8% lower than a year ago, TRW said.
In Orange County, the decline was accounted for by a steep decline in new home sales, the TRW figures showed.
“Southern California housing prices have reached the point where the average wage earner simply can’t afford to purchase a home,” said Allan Lubitz, director of product development and communications for the TRW unit. .
In Orange County’s resale market, according to the state trade group, sales of single-family homes rose 11% from January’s figures on a non-seasonally adjusted basis, but were down 10% from a year ago. The median price of a detached home in the county increased 1.1% to $243,285 in February from $240,624 in January.
The record high for the county’s single family resale market was set last July when the median price hit $255,897.
Leslie Appleton-Young, vice president of research and economics for the state realtors group, said Orange County sales rose in February in part because sellers were “negotiating” and therefore some properties were “realistically priced.”
Home sales in the nation as a whole also suffered in February. The number of existing single-family homes sold fell 2.3%, to 3.44 million units on a seasonally adjusted annualized basis, down from 3.52 million in January, the National Assn. of Realtors said.
The annualized rate represents what would be the total number of homes sold for all of 1990 if February’s pace is sustained throughout the year.
Some analysts said the overall surge in California in February was an aberration and is not likely to be sustained in part because mortgage rates are expected to continue rising.
“There will be no softening of interest rates,” and this year’s sales “will be slower than last year’s,” said Appleton-Young.
February’s figures were “not a surge, but a normal rhythm of the marketplace,” said Sanford R. Goodkin, a San Diego real estate consultant.
In California, 560,663 existing, single-family detached homes were sold in February on an annualized basis, up 8.2% from an annualized rate of 518,353 in January, the state realtors group reported. But the February sales were down 6.3% from the year-ago month, the realtors group said.
Appleton-Young said most analysts thought the Federal Reserve would ease interest rates, “but it was unable to do so because of (rising) interest rates in Japan and West Germany.” As a result, mortgage rates rose, in response to rises in other interest rates.
The Federal Housing Finance Board said the average rate on fixed-rate mortgages of existing homes sold in February rose to 10.30% from 10.13% in January. That was the largest monthly increase since May, 1989, when the rate increased 0.25 percentage points from the previous month.
The median price of an existing single-family home in California rose to $197,184 last month, up 1.1% from $194,952 in January. The median price means that half the homes sold for a higher price, while half sold for less.
In the Los Angeles region, sales dropped 16.8% from January on a non-seasonally adjusted basis and were down 23.6% from February, 1989. The median price in the region fell 1.7% to $210,123 in February from $213,753 in January. Last month’s median price, however, was up 6.1% from February, 1989, when the median price was $197,991.
Nationwide, the median price was $95,400, down from $96,300 in January and up from $91,800 a year ago.
HOME SALES IN CALIFORNIA
February, 1990, regional home sales activity. Regional sales data is not seasonally adjusted.
Percent Percent Percent Percent change change change Change in in in sales in sales price price activity activity Median from from from from price Jan. 90 Feb. 89 Jan. 90 Feb. 89 Calif. (sf) $197,184 1.1 3.7 8.2 -6.3 Calif. (condo) 144,965 2.4 8.8 -9.2 4.4 Central Valley 105,209 0.6 17.9 -6.7 26.2 High Desert 108,518 22.4 31.5 59.7 18.6 Los Angeles 210,123 -1.7 6.1 -16.8 -23.6 Monterey 235,999 -3.5 11.3 -19.6 -14.8 No. Calif. 133,636 13.0 42.5 -16.3 37.0 No. Wine Co. 180,217 4.4 29.8 -42.6 11.8 Orange Co. 243,285 1.1 4.4 11.0 -10.0 Palm Springs/ Lower Desert 113,499 -13.2 16.7 4.4 50.5 Riverside/ San Bernardino 130,473 0.4 13.0 -5.2 -1.7 Sacramento 127,551 2.6 26.5 -10.3 27.7 San Diego 180,941 0.2 6.4 -0.1 57.8 S.F. Bay 261,159 -0.6 8.1 1.5 -21.1 Santa Barbara 226,315 -11.9 8.0 -11.7 6.7 Santa Clara 273,104 0.5 9.2 5.7 -25.9 Ventura 239,646 -4.3 -1.8 -4.7 -25.9
A comparison of median home prices by region for the months of February, 1989, and February, 1990.
February, 1990 February, 1989 California (sf) $197,184 $190,197 California (condo) 144,965 133,274 Central Valley 105,209 89,207 High Desert 108,518 82,500 Los Angeles 210,123 197,991 Monterey 235,999 211,979 No. California 133,636 93,750 No. Wine Country 180,217 138,799 Orange County 243,285 233,129 Palm Springs/Lower Desert 113,499 97,222 Riverside/San Bernardino 130,473 115,491 Sacramento 127,551 100,833 San Diego 180,941 170,000 San Francisco Bay 261,159 241,695 Santa Barbara 226,315 209,615 Santa Clara 273,104 249,999 Ventura 239,646 244,010
Based on closed escrow sales of single-family, detached homes only (no condos). Reported month-to-month changes in sales activity may overstate actual changes because of the small size of individual regional samples. Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.
