Developers Find Home Prices ‘Settling Down’ : Housing: April sales outpaced 1989 levels but fell over 10% from March, a survey found.
Orange County home sales grew 6.2% to 3,923 units in April from a year earlier, but fell 10.5% from March, a research firm said Friday.
At the same time, the average sales price of $250,081 was down a slight 1.77% from a year ago. However, responding to a shrinking supply of homes, prices rose 3.3% in April compared to March, TRW Real Estate Information Services reported.
Housing specialists say the year-to-year sales increase shows that buyers still are seeking homes in the county, although not at the frenzied pace of 1988. The slight price decline shows that sellers have recognized that the market can no longer support the asking prices of the late ‘80s.
“We were searching for the top (price level) of the market over the past few years, and last year we found it,” Orange County developer William Lyon commented at a recent building industry conference in Newport Beach. “Now prices are settling back down.”
Supply is also coming down, housing analysts say, as builders cut back on new development in order to provide a market for unsold homes.
To move those homes, builders have lowered prices in some areas and are offering various incentives, including allowances for landscaping and decorating, and lower initial mortgage interest rates.
Developers are also building smaller homes to lower costs.
The strategies appear to be working. New homes accounted for 14.4% of total sales for April, up from 13.2% a year earlier.
New and resale condominiums also continued a strong showing, accounting for 24.8% of April’s total home sales in the county. In April, 1989, condos accounted for 19.3% of all sales.
Further illustrating the strength of the condo market, TRW’s report showed that condos were the only type of housing in the county to show both monthly and yearly price increases.
The average selling price for a condominium in the county last month was $172,841, up 4.2% from March’s $165,811 and 2.5% higher than the year-ago average of $168,572.
The TRW statistics track all types of owner-occupied housing--new, resale, single-family and attached--and count only sales that closed and were recorded during the month, meaning that most of the sales contracts were drawn up 30 to 90 days earlier.
HOUSING MARKET IN ORANGE COUNTY Average Home Price
Average slae price for new and resale houses and condominiums: $250,081 April 1990
MONTHLY HOME SALES
Total sales of new and resale houses and condominiums: 3,923 April 1990.
