Home Prices Keep Falling, Another 2.5% During August : Real estate: The average selling price declined to $251,147, TRW report says, another sign of a stalled market.
Orange County home prices continued to fall in August, dropping 2.5% in another indication that the continued downturn in the residential real estate market has yet to turn the corner, a report showed Thursday.
The report released by TRW REDI Property Data showed the average price of homes sold in the county during August declined to $251,147, compared to $257,682 in the same month a year earlier.
Even so, Orange County fared better than Southern California as a whole during the month. Average prices for the combined five-county area fell by 4.2% to $213,639 in August, from $223,089 a year earlier.
“Again, it’s the weak economy,” said Al Gobar, a real estate analyst in Placentia. “The prices have fallen, but it’s amazing how moderate they have fallen given the economy.”
Analysts also say that prices have remained relatively stable given a 17.1% drop in the number of homes that have been sold in Orange County during the first eight months of the year. A total of 20,401 new and existing homes were sold, compared to 24,618 in the same period a year earlier.
“People (with existing homes) aren’t selling,” said Nima Nattagh, a market research analyst for TRW REDI, which monitors real estate transactions based on county recorder files. “They are holding off, waiting to see if the prices go up. They are not willing to put their houses on the market unless they absolutely have to.”
The average price of an existing home in Orange County fell 3.5% in August to $247,736, compared to $256,675 in August 1991.
But prices of new homes in the county showed a very slight improvement, rising 0.7% in August to $265,351, compared to $263,412 in the same month a year before. San Diego was the only other county to report an increase.
“That’s a nominal increase, but the supply of new homes has declined at a much faster pace than demand,” Nattagh said.
In Southern California, the average price of a new home dropped 3.2% to $200,992, from $207,636.
Analysts are quick to point out that home prices have not eroded to 1987 levels, when the average price in Orange County was $160,988. Prices skyrocketed from mid-1987 to mid-1989.
“Contrary to popular perception, we have not really seen the price collapse,” Nattagh said. “It’s optimistic in that sense. But in terms of the number of transactions and purchase, we are still not looking at an optimistic scenario.”
Tough Time to Sell a House
The number of new and existing homes sold in Southern California during the first eight months of the year declined from the same period in 1991. And in August the average price of both resale and new houses dropped, although new-home prices in Orange and San Diego counties increased slightly from August, 1991.
NUMBER OF SALES
EXISTING HOMES NEW HOMES County 1991 1992 % Chg. 1991 1992 % Chg. Orange 20,412 16,908 -17.1% 4,206 3,493 -16.9% Los Angeles 54,280 45,701 -15.8 5,843 4,197 -28.2 San Diego 16,322 15,191 - 6.9 3,141 3,051 - 2.9 San Bernardino 13,473 11,943 -11.3 3,898 3,305 -15.2 Riverside 11,809 10,254 -13.1 4,827 3,964 -17.8 TOTAL 116,296 99,997 -14.0 21,915 18,010 -17.8
AVERAGE PRICES, AUGUST
EXISTING HOMES NEW HOMES County 1991 1992 % Chg. 1991 1992 % Chg. Orange $256,675 $247,736 -3.5% $263,412 $265,531 +0.7% Los Angeles 254,656 247,372 -2.9 213,743 193,745 -9.3 San Diego 212,763 205,271 -3.5 226,992 227,892 +0.4 San Bernardino 132,731 130,828 -1.4 178,996 162,363 -9.3 Riverside 151,788 146,360 -3.6 166,560 157,775 -5.3 TOTAL 225,975 216,250 -4.3 207,636 200,992 -3.2
Source: TRW REDI Property Data
