REAL ESTATE : Rebound in Resale Market Expected to Help New-Home Sales
The typical new home in Orange County sets the buyer back about the same as almost 1,000 ounces of gold--or one ashtray for a U.S. military aircraft--so it’s no wonder that the only people who can afford the down payment on a new $300,000 abode are those with a big chunk of equity from the sale of a former homestead.
So no matter how many new homes the county’s builders erect in the next year or so, the ultimate recovery of that industry is going to have to await the recovery of the residential resale market.
The good news is that it might just be happening.
Corporate types at several of the nation’s largest residential real estate chains say they have seen a startling increase in home-sales activity in the first two months of the year.
At Coldwell Banker Residential Group in Mission Viejo, with 1,900 offices in the United States, Chairman Chandler Barton says sales were up 35% nationally over the first two months of 1991. The Midwest and Northeast lead with 48% increases, and the western states lagged behind the rest of the country with a 17% increase.
Barton points out that residential sales in the first two months of 1991 were depressed because of the Persian Gulf War, but says the current level of sales activity still reflects a substantial and potentially long-lasting improvement.
Stephen Bauer, president of Prudential Realty Affiliates in Costa Mesa, which has 900 offices across the country, agrees.
“From 90% of our affiliates you will get very positive feedback about the market today,” he said. “When we look at our major metropolitan markets, like Southern California, Chicago and New York, we find a 47.9% increase in sales in January compared to January, 1991. And in our non-metropolitan markets we have a sales increase of 29.3%.”
The numbers aren’t quite as big at Century 21 Real Estate Corp. in Irvine, but with 5,200 offices nationally there isn’t nearly as much room for the huge growth spurts some of the other chains are seeing. “We have offices in all the good markets and all the bad markets and in places where the others aren’t,” says Bob Hutchinson, executive vice president of the giant franchise operation.
Still, Century 21 offices around the county are reporting a 15% to 16% improvement in the first two months of the year, compared to the same period last year, he said.
