October Home Resales Down Furthest Since ’82

Home resales in Orange County plunged 31.9% in October from the same month last year, the biggest such drop since the housing slump of 1982, according to a report Monday.

At the same time, the median resale price of a single-family home in the county dropped 5%, to $236,240 from $248,670 in October, 1989. Prices have dropped from a record high of $251,837 in June, 1989, according to the report by the California Assn. of Realtors.

The decrease comes as county homeowners continue to seek a price level that will stimulate sales in a weak market.

Statewide, resales of single-family homes were off 22% from October, 1989, the realty trade association said in its monthly report on the California housing market.

The median price of a resale home statewide fell 2.9% in October, to $188,060 from $193,730 a year earlier.

The association’s survey is based on reports from 80 boards of realtors, including seven in Orange County. The survey does not disclose the actual number of homes sold in each county and includes only single-family, detached homes.

Orange County posted one of the biggest October-to-October sales declines of the 17 regions included in the survey and one of the few drops in sales activity from September.

While the surrounding Southland counties all reported increased sales from September, Orange County sales were down 11.7% for the month.

The county’s high resale prices account for part of the slump, said David Brownstone, an economist at UC Irvine. “You have to remember that prices in the county were running way ahead of the state averages in 1988 and 1989. So now, even though things are cooling off, Orange County is still a lot more expensive. And that drives potential buyers into other areas, like Riverside,” he said.

The market for new homes in Orange County is in a deep depression as well, and builders are lowering prices and offering big financial incentives to lure buyers.

“So the resale market in Orange County, more than most areas of the state, is facing tremendous competition as (lower-cost) new housing absorbs sales,” said Leslie Appleton-Young, chief economist for the realtors association.

Both Brownstone and Appleton-Young said they expect sales to continue to be sluggish--or to decline further--through at least mid-1991. If the nation’s economy rebounds by then, buyers could return to the market in sizable numbers.

Despite Orange County’s weak showing in October, sales in most of the state rose after a steep decline in September that economists attributed to buyer wariness in the wake of Iraq’s invasion of Kuwait.

“There was a big hesitation immediately after the invasion,” Appleton-Young said. “Now we are seeing a revival after the invasion, at least in areas where affordability (of homes) still is reasonable and where you don’t have strong competition from new housing products, as you do in Orange County.”

Volume of Home Resales Keeps Sliding The California Assn. of Realtors compiles sales and pricing information on a sample of resale homes in Orange County. The data is compiled by the following local boards of realtors: Irvine, East Orange, Huntington Beach-Fountain Valley, Newport Harbor-Costa Mesa, Saddleback Valley and North Orange. Sales Volume Percentage change from year-ago month Jan: -16.2% Oct: -31.9% Median Price Nov: $226 Oct: $236 Source: California Assn. of Realtors