House Resales Decline While Median Prices Climb
Orange County’s single-family resale housing market continued a nearly 18-month downward tumble in May as sales fell 17.2% from a year ago, the California Assn. of Realtors reported Tuesday.
At the same time, the median price of a resale home in the county rose nearly 6%, to $256,990 from $242,677 a year earlier.
The median price was 5% higher than April’s $244,784, making Orange County the only one of the state’s major urban areas to post both month-to-month and year-to-year increases.
The price hike was caused by a spurt in sales of larger homes as sellers apparently began lowering asking prices in response to the slower market, industry specialists said.
Statewide, sales were down 11.2% from May, 1989, and the median price of a resale home, at $196,094, was off 2.5% for the year.
The declining sales pace in Orange County, based on reports from area realty boards, represents a 35% decline since May, 1988, when new and used homes in the county were selling almost as fast as realtors could put up “for sale” signs.
But the slowdown--hard as it is on Realtors’ pocketbooks and sellers’ patience--still doesn’t signal a housing slump, said Leslie Appleton-Young, vice president and chief economist for the state realty association.
Instead, she maintained, the slowing of sales activity--caused both by the county’s high prices and by buyer uncertainty over interest rates--has merely “brought Orange County sales back to where they were in 1987, and that was considered a pretty good year.”
The best indicator of the resale market’s health, she said, is the backlog, or the approximate time it would take to sell all listed homes at the current sales pace.
At the height of the sales boom two years ago, the Orange County backlog was five months. Currently, it is about 10 months. A normal market backlog, she said, is 10 to 12 months.
The county’s May sales activity actually was up 2.3% from April and the May-to-May sales decline wasn’t as steep as in Los Angeles and San Francisco counties, where single-family resales activity for the 12 months was down 19.4% and 22.9%, respectively.
The realty association’s figures also do not include sales of condominiums or other attached homes, which reportedly are making up an increasing share of overall resales in the county.
“Attached housing sales are a big part of the market these days,” said Chuck Neubauer, vice president and Orange County regional manager for Coldwell Banker Residential Real Estate.
“I don’t hold with all this doom and gloom stuff, because you don’t get a realistic picture without the attached unit sales being included,” he said.
Appleton-Young said the increase in the median price of resale single-family homes in the county in May came largely from unusually high sales of large homes. Homes with four or more bedrooms, she said, accounted for 44.6% of all Orange County resales last month, contrasted with only 20.3% in Los Angeles County.
REGIONAL HOME PRICES AND SALES
Pct. Change Pct. in Sales Region May 1990 May 1989 Change from May ’89 Orange County $256,990 $242,677 +5.9 -17.2 Los Angeles 215,871 217,708 -0.8 -19.4 San Diego 180,901 184,553 -2.0 +1.5 Palm Springs/Lower Desert 130,000 113,103 +14.9 -4.1 Riverside/San Bernardino $132,951 122,983 +8.1 -4.5 Ventura $238,216 243,552 -2.2 -25.2 California Median 196,094 199,441 -2.5 -11.2
Source: California Assn. of Realtors