Attached Dwellings Outsell Single-Family Units in First Quarter of ’90

Condominiums, town houses and other types of attached housing outsold more expensive single-family houses in Orange County during the first quarter of 1990 for the second quarter in a row, according to a report released Monday.

That’s because the median price for a single-family house--now at $335,000--is among the highest in the nation and beyond the reach of most families even in affluent Orange County.

A condo, by contrast, had a median cost of $176,900 during the first three months of the year and was even a little less expensive than last year at this time, reports The Meyers Group, a Corona consultant. To be exact, condos were 8% less expensive than last year’s $192,900 median.

House prices, by contrast, continued to rise, increasing about 4% from last year’s median $320,990. House prices were actually higher during much of 1989 but have fallen back recently.

Builders sold 880 houses and 1,114 attached dwellings during the first quarter of the year, so condos constituted 56% of the total. Sales of all new homes rose from the traditionally slow fourth quarter.

But looking back over the last year, sales of houses have slowed dramatically while condo sales have taken off, according to Meyers Group figures.

Builders sold 958 condominiums during the first quarter of 1989, or 16% fewer than they sold in the same period this year. They sold 1,138 houses last year, or 23% more than they sold in this year’s first quarter.

Not only are condos more affordable, the report said, but builders are constructing them better, and a condo “is now an accepted alternative” to a house. Orange County buyers traditionally have demanded a typical suburban house with its own yard, no matter how small the yard.

With sales slower now than at the beginning of 1989--an exceptionally strong quarter at the tail end of the 1988 sales boom--the inventory of unsold homes has ballooned.

There were nearly 3,000 houses and attached homes in builders’ inventories at the end of the first quarter of this year, up nearly 10% from fourth-quarter 1989.

Builders and their consultants still say the market remains strong compared to other parts of the nation. But they are taking some extraordinary measures to sell houses, measures that would have been unheard of two years ago when some houses sold in minutes and long lines of buyers camped in front of new subdivisions.

“Many projects,” the report said, “continued to offer incentives and concessions to stimulate sales.”

Those incentives--typically, help with closing costs or free extras added to the house--range in value up to $25,000 per house now as builders try to get more people into the market and unload their inventory.

And some builders simply “reduced pricing in lieu of incentive programs. Part of the increase in (sales of condominiums) can be attributed to these programs.”

Most of the new homes sold--and most of the unsold inventory--is in Orange County’s comparatively less-developed southern half.

There were 227 projects in the county from which buyers could choose during the first quarter of this year, up by 25 from late last year, the report said.

NEW HOUSING SALES TRENDS

Housing sales in Orange County increased 23.3% in the first quarter of 1990 over the previousthree-month period. The inventory--houses for sale--also increased 9.8% in the first quarter over the fourth quarter of 1989.

% Change % Change Area Sales from 4th Qtr. Inventory from 4th Qtr. Coastal North 242 242.0 143 19.2 North 111 -45.9 115 0.9 Central 380 -7.8 385 13.9 South 1,261 39.8 2,286 9.1 Total 1,994 23.3 2,929 9.8

Source: The Meyers Group