Housing Sales Tumble 18.5%; Average Price Drops by 5.6% : Construction: Despite year-to-year decline, the market for the first nine months of 1990 has been mostly flat.
Orange County housing sales declined 18.5% in September from a year earlier and the average price fell 5.6% during the same period, a report issued Tuesday said, and there is no sign of recovery for the slumping housing market as recession fears grow.
Still, amid all the gloom, the report by TRW Real Estate Information Services shows that the housing market for the first nine months of 1990 has been mostly flat. In fact, housing sales and average prices for the nine-month period are slightly ahead of last year.
Sales so far this year have been spaced fairly evenly over each quarter. There was no discernible decline in the traditionally slow third quarter until September, when sales closings were off considerably from September, 1989.
There were 3,373 sales that closed in September, down from 4,139 a year ago. The monthly sales total is the lowest since February and the fifth-lowest since January, 1988, when TRW began compiling monthly sales data for Orange County.
TRW’s monthly reports include all new and resale homes and condominiums that closed escrow during the month--meaning that the actual sales contracts were signed from one to three months earlier in most cases.
The sales pace of 34,980 units for the first three quarters was up a scant 0.5% from a year earlier, when 34,801 residential sales were closed by the end of September, TRW said. For the third quarter, the 11,829 closings were down only 1.2% from 11,987 closings in the third quarter of last year.
“That is amazing,” said Gary Wescombe, a real estate industry consultant with the Newport Beach office of the Kenneth Leventhal & Co. accounting firm. “I would have thought the third quarter would be way down.”
Wescombe said he couldn’t explain the apparent stabilizing but said it indicates that “everyone is complaining not because sales have shrunk so much already this year but because they are afraid they will shrink in the future.”
A spokesman for TRW, which compiles the data but makes no attempt to analyze it, said the residential market in Orange County appears to be a little stronger this year than in surrounding counties.
But while the current nine-month figures look good compared to last year’s, they remain positively anemic when contrasted with the 47,476 units sold in the first nine months of 1988--the last year of a three-year bull market for Orange County residential real estate.
The three-quarter total for this year is 26.3% lower than for the first nine months of 1988.
The two-year sales slowdown has had one moderately beneficial impact as sellers of both new and resale homes in recent months have dropped prices to attract those buyers remaining in the market.
So while the county still is one of the costliest home markets in the nation, average prices for residences sold last month dropped to $246,022 from $260,654 in September, 1989, according to information compiled by TRW.
And the nine-month average price of $250,557 was up less than $900 from the $249,677 average for the first nine months last year. The increase from last year didn’t even outpace inflation, but the nine-month average was up a hefty 21.2% from the 1988 nine-month average of $206,709.
Resale activity, which makes up the bulk of the sales, posted the largest decline in September. The 2,843 units that closed escrow represented a 20% decline from 3,554 units sold a year earlier.
Average resale prices fell 5.7% to $241,211 from $255,891 in September, 1989, according to the TRW report.
New home sales were off 9.4% from a year ago, with 530 closed sales last month versus 585 in September, 1989. Average prices for new homes dropped 6.6% to $262,293 from $280,741.
