People will have bought fewer homes in Orange County this year than in any of the past five years.
About 30,000 houses and condominiums will be sold by year's end, according to a projection released Tuesday by TRW Redi Property Data. That's only about half as many as the 56,000 homes sold in the boom year of 1988.
Every other county in Southern California lost ground too, according to TRW, a market research concern based in Riverside.
The Bay Area, on the other hand, which has been much less affected by the recession, had a smaller drop in sales. Southern California is far more dependent on defense contractors, which have been hurt by a downturn in defense spending.
In Orange County, sales of new houses took a bigger hit than resales this year. The number of new home sales dropped to about 5,000, which is a 55% decline from the 12,000 units that changed hands in 1988.
That's been bad news for the construction industry, one of the county's most important industries. Together with a cutback in constructing commercial buildings--stores, offices and the like--the continuing economic downturn meant a loss of 5,000 construction jobs through the first nine months of this year, reducing the work force in that sector to 64,000.
Home resales, a much bigger portion of the housing market, also declined sharply to about 25,000 units. That is a 44% decline from 44,000 in 1988.
Prices took it on the chin, too. For the fourth year in a row, home prices dropped in Orange County, something that would have been unthinkable as recently as the late 1980s, when prices of new homes sometimes jumped $10,000 in a month.
The average price of a home--including new and older houses and condominiums--is projected at $249,439 this year. That is down from 1991's $253,724, which in turn was down from 1990's $255,626. In 1989, the average was $257,807.
Falling home prices, while bad news for owners, is of course good news for buyers and also for builders, who can price their houses lower to broaden their market, said Nima Nattagh, a market research analyst for TRW.
As for next year, with the economy improving, "if Orange County follows the rest of Southern California, demand and prices for homes should stabilize," Nattagh said.
"The reason," he said, "is that the region has had three consecutive years of declines in home purchases, but the rate of that decline has decreased each year.
"Next year it should slow still further," he said.
O.C. Homes: Fewer Sold, and At Lower Prices
Since the housing boom of the late 1980s, the number of houses sold or resold in Orange County has declined sharply. Prices, too, have fallen steadily for both new and existing homes. Fewer than 30,000 transactions will be completed this year, compared with nearly 35,000 for 1991. All 1992 figures are projections.
Number of Houses Sold in O.C. in 1992 New: 5,219 Existing: 24,661
O.C.'s Average Home Prices in 1992 New: 259,937 Existing: 247,143
Source: TRW Redi Property Data