Home Price Rises Only 3.9%; Sales Drop 20%
Reflecting what real estate specialists say is a return to a normal market after two years of buyer frenzy, the price of resale homes in Orange County inched up a mere 3.9% in the first quarter from the same period in 1989, while total sales fell 20%, a state realty trade group reported Monday.
The median price of a resale single-family home in the county for the first quarter was $243,599, up from $240,624 in the last quarter of 1989. It was $234,381 in the same period a year ago.
The slowdown in price appreciation dropped Orange County into fifth place among the state’s most expensive resale markets. Just two years ago, Orange County led the nation in housing prices.
Topping Orange County in the first quarter were Santa Clara County, with a $273,673 median; the San Francisco Bay Area, at $262,182; Monterey County, at $244,191, and Ventura County, at $243,218.
But though Orange County’s first-quarter sales fell from a year earlier, they rebounded from a weak fourth quarter, posting a 5.4% increase in volume and a 1.2% increase in price for the initial three months, the California Assn. of Realtors said.
And that made Orange County the only one of the state’s major housing regions to post a sales increase from the fourth quarter, the group reported.
The association’s numbers do not include condominiums.
Statewide, 530,105 resale single-family homes closed escrow during the first quarter--up 2.9% from 515,354 homes sold in the fourth quarter of 1989 but down 13.3% from a year earlier, the association said.
The statewide figures are seasonally adjusted, while figures for the individual counties are not.
Resale activity on an annual basis was up in the Central Valley and San Diego and down in the more expensive Los Angeles, Orange County, San Francisco and Ventura areas, the association said.
“Despite lower interest rates than a year ago, sales in the coastal metropolitan centers have been stalled by high home prices and a large inventory buildup,” said Leslie Appleton-Young, vice president of research and economics for the association.
The slowdown in price hikes--resale home appreciation rates were in the double digits this time last year--should help attract buyers in the metropolitan areas during the second quarter, she said, “but activity will be tempered by rising interest rates. Overall, we are projecting an 11% sales decline this year, compared with all of 1989.”
Statewide, the median price of an existing single-family home sold during the first quarter was $196,232, up 2.2% from $192,044 in the last quarter of 1989, and 3.5% higher than the revised $189,583 reported for the first quarter of 1989.