Orange County housing sales continued a two-year decline in November with a 19.2% drop from November, 1989, according to a study released Tuesday.
The average selling price of a home in the county last month was $239,671, down 2.7% from $246,442 a year earlier, but up slightly from October’s $236,421 average, TRW Real Estate Information Services reported.
Sales declined last month to 3,297 new and resale homes and condominiums from 4,080 units in November, 1989, the biggest year-to-year slippage since October, 1989, when sales were off 27.3% from October, 1988.
But the decline failed to dampen analysts’ predictions that the worst of the housing sales slump in Orange County may be nearing an end.
Despite November’s weak showing, total sales in the county in the first 11 months of the year are down only 1.5% from the same period in 1989. That compares with a 15% decline in 11-month sales for the five Southern California counties that TRW monitors.
And Orange County’s November sales drop was the smallest in the Southland, TRW reported. Declines in other Southern California counties ranged from 24.3% in San Bernardino County to 37.4% in Riverside County.
“It seems that we are finally getting away from comparisons with the boom months in late 1988 and early 1989 and looking at some more realistic month-to-month comparisons,” said Ken Agid, a real estate consultant in Irvine.
“And the numbers show that the major drop is over. We won’t be seeing wholesale reductions in prices any more, and while there probably will be more declines in sales, we are out of the period of big monthly decreases,” Agid said. “Instead, we’ll see sales slightly down or even flat, and that will gradually build to a turnaround about the middle of next year.”
At TRW, which tracks sales of new and used homes and condominiums that close escrow each month, Vice President Ed Setzer said November’s sharp drop in sales reflects an increasingly negative economic outlook for 1991 and the uncertainty of the Persian Gulf crisis. “Home buyers are reluctant to make such a major economic commitment in these uncertain times,” he said.
December sales should increase as buyers complete major transactions before year’s end, he said. But January’s sales are likely to fall as consumers begin grappling with income taxes and other beginning-of-the-year expenses.