New Home Sales Fall 17% in First Quarter : Real estate: While down from a year ago, the figures show a 51% increase from the traditionally slow fourth quarter, and analysts remain optimistic.
New home sales in Orange County during the three months ended March 15 fell 17% from the first three months of 1991, but the decline doesn’t mean that the nearly three-year-old housing industry slump is worsening, industry analysts say.
A total of 1,639 new homes were sold in Orange County from mid-December through mid-March, and while that is down from the same period in 1991, the sales represent a 51% increase from the traditionally slow fourth quarter.
“I’m still confident that new home sales in Orange County will end the year 5% to 10% above 1991 levels,” said Jeff Meyers, president of the Meyers Group and author of the quarterly sales report.
He said that first-quarter sales a year ago were pumped up by a short-lived boom in consumer confidence in the wake of the Gulf War and that first-quarter sales this year have been constrained because the credit crunch is keeping many builders idle.
Builders who can get construction loans to build new projects, however, are finding that there are buyers out there.
Lionel Punchard, president of First Republic Mortgage Corp. in Santa Ana, said he has seen a 30% increase in business in just the past month as interest rates have begun inching up and buyers have jumped back into the market to close deals before rates get any higher.
In addition, most new home sales in Orange County these days are occurring at newly opened developments that were designed to come onto the market with lower prices than were prevalent in past years, Meyers said.
“There is a real polarization. New projects are outselling older ones because the new products are priced for value. The older projects that are still selling standing inventory are tainted in buyers’ minds by the incentives they’ve had to offer and by the slow sales pace,” he said.
At the same time, Meyers said, median base prices decreased in both the attached and detached markets. The base price of an attached home fell 9% from the fourth quarter to $168,900, while the median for a detached home dropped 4% to $309,900.
Compared to the first quarter of 1991, attached home prices were down 6%, while the median price for detached homes was off 4.6%.
Inventory levels, fueled largely by the Irvine Co.’s decision to convert several large new apartment complexes into condominium projects, rose 5% from the fourth quarter to 2,828 units.
In the first quarter of 1991, inventory stood at 2,646 units, according to Meyers Group figures.
While the inventory increase “is not good news,” Meyers said, “it is still a far cry from our all-time-high inventory level of 3,637 units in the third quarter of 1990.”
Meyers said he expects Orange County new home sales in the second quarter to outstrip those in both the first quarter of 1992 and the second quarter of 1991.
Top Builders
Despite a 17% drop in first-quarter new home sales, the Meyers Group, a Newport Beach real estate consulting firm, believes that total 1992 sales will surpass last year’s sales. Quarterly sales were up 51% from the traditionally slow fourth quarter. Following is a list of the leading builders in the three months ended March 15:
Rank Project, Location Type Builder 1. Shadow Canyon Attached Irvine Pacific* Tustin 2. La Tierra Detached Fieldstone Co. Rancho Santa Margarita 3. Rancho Vera Cruz Attached Irvine Pacific* Tustin 4. Mandevilla Attached Irvine Pacific* Tustin 5. Canyon Hills Attached Irvine Pacific* Orange 6. Vintage Place Detached Vintage Communities Anaheim Hills 7. Bel Air Detached Bramalea Homes Mission Viejo 8. Brisa Ladera Detached Akins Development Rancho Santa Margarita 9. Ventana Attached LDM Development Tustin 10. Cabo Vista Attached Fieldstone Co. Rancho Santa Margarita
Rank Project, Location Sales Price Range 1. Shadow Canyon 42 $89,990-$169,990 Tustin 2. La Tierra 40 $216,990-$245,990 Rancho Santa Margarita 3. Rancho Vera Cruz 38 $87,900-$153,900 Tustin 4. Mandevilla 36 $89,900-$146,500 Tustin 5. Canyon Hills 33 $89,900-$148,000 Orange 6. Vintage Place 30 $231,000-$256,000 Anaheim Hills 7. Bel Air 30 $199,900-$295,000 Mission Viejo 8. Brisa Ladera 27 $175,900-$200,900 Rancho Santa Margarita 9. Ventana 25 $175,990-$231,990 Tustin 10. Cabo Vista 25 $137,990-$166,990 Rancho Santa Margarita
* Converted from an apartment development
Source: The Meyers Group
