Home Resales Rise Nearly 11% in State, 14.3% in O.C., Report Says

Home resales in California jumped nearly 11% in October, a realty trade group said Tuesday, as anxious sellers cut their asking prices and rising mortgage rates spurred buyers who had been waiting for rates to bottom out.

While the statewide surge in sales--which followed a 1% rise in September and were 7.6% higher than in October, 1991--raised hopes for an economic rebound, the report from the California Assn. of Realtors pointed to continued tough times in Los Angeles County.

On a month-to-month basis, sales rose in Orange County and all other major metropolitan areas except Los Angeles, which showed a 2.5% drop from September. Los Angeles’ October sales were also down 2.8% from October, 1991, the report says.

In Orange County, according to the report, sales of previously owned single-family homes were up 14.3% in October from a year earlier. The median price of $232,640 was down 1.3% from $235,790 in October, 1991.

The realtors’ numbers are widely reported but are considered valuable by industry insiders only as broad estimates. They don’t include sales of attached homes such as townhomes and are based on tallies supplied by individual realty boards rather than on a count of actual closed and recorded sales.

By contrast, an analyst for TRW-Redi Property Data Services in Riverside--which counts recorded sales--said Tuesday that 2,060 previously owned homes were sold in Orange County during October, down 6.8% from 2,211 a year earlier.

The TRW-Redi figures include attached and detached homes and condominiums. Analyst Nima Nattagh said the average price of a resale home in Orange County last month was $243,285, up 2.7% from $236,888 a year earlier.

The price used by the realtors’ group is the median--the point at which half of all homes in the survey cost more and half cost less. The price cited by TRW is the average--the sum of all sales prices divided by the actual number of transactions. Both figures provide rough estimates of the midway mark in housing prices.

“California’s housing market is picking up some steam, but L.A. is lagging a little behind other areas because it has been hit a little harder by layoffs,” said Walt McDonald, a Riverside real estate broker and president-elect of the state trade group. “Sales aren’t going to skyrocket any time soon, but I think we’re on track for a slow and steady rebound.”

The October increase was the first back-to-back monthly improvement since April. Sales were up about 2% in Orange County, 3% in San Diego and 4.5% in Ventura. Sales rose less than 1% in the Riverside-San Bernardino area. Outside Southern California, sales rose about 3.8% in the San Francisco Bay area.

But the median price of a single-family home in California dipped less than 1% from September to October to $194,790, which some experts attributed to a growing willingness by sellers to cut their prices.

“Sellers are pricing their properties a lot more realistically because they don’t want to waste their time holding a bunch of open houses that nobody will come to,” said David Carden, a realtor with Riedy Co. in Long Beach. “A house that’s priced well will sell fast. A house that isn’t priced well won’t move at all.”

Carden and other experts said the October sales gain was also fueled by buyers and sellers who were eager to close their deals before winter arrives.

Winter is generally the slowest season for home sales, largely because consumers are preoccupied with the holidays and cold weather keeps many buyers indoors.

An upturn in interest rates may also have contributed to last month’s sales increase. Rates on 30-year, fixed-rate loans bottomed at about 7.8% in September and then jumped nearly three-fourths of a point in October.

“The rate increase turned a lot of looky-loos into buyers,” said Paul Havemann of HSH Associates, a New Jersey-based company that tracks interest-rate trends.

“A lot of people spent the summer on the sidelines, waiting for rates to go lower. But when rates shot up in late September and again in October, they decided to take the plunge and buy a house before rates could go up even more.”

Sales of condominiums rose 8.8% in October from September, the realty trade group said, as first-time buyers looked for less expensive alternatives to single-family homes. Condo sales were off about 18% from a year earlier.