Condo Activity Pushes Housing Sales Up in O.C.
Spurred by a strong condominium market, housing sales in Orange County rebounded in March to a seven-month high after falling to a two-year low in February.
The large number of condos and resale home sales that closed during the month pulled the average sales price down to $241,993, 4.1% below February’s average of $252,350 and the lowest since February, 1989, TRW Real Estate Information Services reported Tuesday.
The improvement doesn’t necessarily signal a major revitalization of the local residential real estate market, industry consultants said.
But it does show that there still is a lot of demand for homes and that builders are turning away from the $300,000-and-up homes that saturated the market last year and are constructing lower-priced units to satisfy that demand.
In all, 4,383 new and resale units were sold in March, with condos accounting for 26% of the total, according to the market research firm.
March sales in the county, TRW reported, were 4.6% below the 4,594 units sold in March, 1989, but up 42% from February’s 3,087 units and was the highest monthly sales total since August, when 4,431 units were sold, according to TRW figures.
Condominium sales in the county totaled 1,152 units, up 58% from 730 units in February and 18.5% higher than the 972 condo units sold in March, 1989.
The March market share for condos was higher in Orange County than in any other Southern California area, TRW said. Condominiums represented 23% of total March sales in San Diego, 16% of the Los Angeles total, and only 4% of the San Bernardino total and 3% of the Riverside total.
TRW tracks only those units legally defined as condominiums, so the total doesn’t include attached housing in which there is no joint ownership of recreational and other common facilities.
The TRW figures also combine all types of single-family housing--new, resale, detached and attached--and count only sales that closed and were recorded during the month--meaning the actual sales contracts were drawn up as much as 90 days earlier.
The March totals reflect a new direction in the market, especially for new home developers, said Penelope E. May, president of the Eton Group, a Laguna Niguel real estate market-research and sales-management firm.
“There is still a slump in the higher-priced homes, over $300,000 in Orange County, so builders are lowering prices and offering incentives to move existing inventory and are turning to lower-priced homes in new developments,” she said.
In addition, home buyers in growing numbers are accepting the fact that the traditional, single-family home is largely being replaced by attached housing in Orange County, except in the most expensive segments of the market.
Thus, May said, mainstream home buyers in their 30s, 40s and 50s--attracted by lower prices--now are purchasing the condos and and other types of attached units that for years were shunned by all but the youngest and oldest buyers.
In its breakdown of March sales figures and prices, TRW reported that resale units accounted for 3,732 sales, or 85% of the total--a normal ratio.
The $234,833 average price of a resale unit was 4.5% lower than February’s $245,932 and was down 1.7% from the $238,883 reported in March, 1989.
Average price of the 651 new units sold in March was $268,501, down 2.9% from February’s $276,692 but 0.9% higher than the $266,125 average reported a year earlier.
HOUSING MARKET IN ORANGE COUNTY
AVERAGE HOME PRICE
Average sale price for new and resale houses and condominiums February 1988: $197,110 March 1990: $241,993
MONTHLY HOME SALES
Total sales of new and resale houses and condominiums February 1988: 3,920 March 1990: 4,383 Source: TRW
