O.C. Homes Get Cheaper, yet Fewer Are Sold : Housing: After making a brief comeback in April, new-home prices dipped 6.5% last month. Sales and resales also dropped.
Take heart, house hunters: It’s still a buyer’s market.
Consumer confidence, however, has yet to recover from a long bout of poor self-esteem, and that could hold down prices and sales, hurting Orange County home builders and sellers.
After making a brief comeback in April, new-home prices in the county dipped 6.5% in May from a year earlier, according to a report released Tuesday by TRW Redi Property Services. Signs of a slight recovery had appeared in April, when new-home prices were up 4% from the same month a year earlier. But that ray of hope might have been merely an April Fool’s joke.
Average prices for new homes in Orange County fell to $254,318 in May from $272,063 a year earlier. Prices for homes being resold dropped 1.2% to $249,437; and for all homes, 2.2% to $250,234.
The only Southern California region that saw a price increase in May for all homes was Riverside County, which posted a gain of 2.1% to $158,101. In Los Angeles County, prices for all homes tumbled 4.2% to $247,185.
Orange County held on to its dubious honor of offering the highest new-home prices in Southern California. San Bernardino came in the lowest, with an average of $140,431.
Allan Gantt, regional chairman for the California Assn. of Realtors and owner of Century 21 Accent Realty in Fullerton, speculated that the Los Angeles riots two months ago may have dampened home shoppers’ enthusiasm in May.
“Sales in our office had been picking up until May came along,” Gantt said. “I don’t know if everyone was at home watching TV and not thinking about anything but the riots, or if they were feeling less confident about the economy in Southern California. But things seem to be picking up again in June.”
Another analyst, however, TRW Redi’s Nima Nattagh, pointed out that May figures would not necessarily reflect the aftereffects of the riots. The statistics are based on deals actually closed, so the full effect of the disturbances would not start to show up in the monthly report until June.
“I don’t think you can see a recovery in the short term,” Nattagh said of April’s rosier prices. “Traditionally, May is a good month, so we’re looking at some fundamental factors at play: the bad economy, and the downsizing of companies that translates into unemployment.”
The number of home sales and resales in Orange County also took a dive last month, falling 28.9% to 2,980 from 4,195 in May, 1991. That was the biggest drop for Southern California counties, all of which posted decreases in sales. New-home sales in Orange County fell a whopping 34.6% over the year to 473. In April, they fell 27.5%--also to 473.
One explanation for May’s apparent setback, Nattagh said, is that the figures were compared with an unusually good month from the year before. “May of 1991 recorded the highest number of homes sold that year,” he said. “So making a comparison is a bit unfair.”
