Home Sales Rise Sharply in State, Nation : Real estate: Size of increase surprises housing analysts. Median price in California is down 4.3% from 1992 figure.

Home sales in California and the rest of the United States last month rose to their highest levels this year, two realty trade groups said Monday, as bargain-hunting buyers continued to cash in on softer prices and the lowest mortgage rates in a generation.

Sales in California surged 11.5% in September from August and 18.4% from their year-earlier levels, the California Assn. of Realtors said. Last month’s seasonally adjusted annual sales rate of 469,350 was the highest since December.

Orange County’s resale market has regained some of its previous luster, posting a 29.6% jump over the same month last year.

“When numbers go up like this, it’s mostly first-time buyers,” said Fountain Valley real estate agent James M. Righeimer. “With interest rates as low as they are, and prices and payments so much lower than just a year ago, people who hadn’t a clue that they could afford a home are now able to buy.”

In a recent sale, Righeimer said, a couple with two children and about $47,000 in annual income from the husband’s job were able to qualify for a $231,000 home in a neighborhood in which prices have fallen about 17% since 1991. “Two years ago,” he said, “that house was $270,000. . . . They’re now in a neighborhood they just couldn’t have afforded a few years back. And things like that make sales jump.”

But Righeimer said the September data shouldn’t be viewed as anything more than a good month. “Things like this go up and down,” he said. “It still is going to be a long, slow road” to recovery.

In a separate report, the National Assn. of Realtors said sales across the United States rose 2.6% in September from August and climbed 15.7% compared to a year ago. Last month’s 3.91-million national sales rate was the highest of the year and the second-highest since 1979.

Most analysts had expected Monday’s reports to show a modest increase in sales for September, the first time that fixed mortgage rates had stayed below 7% for an entire month since 1968.

But the size of last month’s sales rise surprised many of them, who thought the traditional autumn slowdown would keep sales increases relatively low.

“We expected sales to be up, but we didn’t expect a jump as big as this,” said Walt MacDonald, a Riverside real estate broker and president of the state trade group. “I think people know that interest rates aren’t going to stay under 7% forever, so they’re finally jumping into the housing market.”

Lower prices also helped fuel California’s sales gains. Statewide, the median price of a home stood at $187,420 in September, down 1% from August and 4.3% below the $195,820 median of a year ago.

Activity in Southern California mirrored the statewide trend. Sales rose but prices fell from year-ago levels in all six Southland counties.

The median price of a home in Los Angeles County was $198,540 in September--down 3.8% from last year--but sales were up 2.5%.

And while Orange County sales surged, the median price of $220,560 was down 5.2% from a year ago.

Overall, sales in California and the rest of the West were up 2.4% in September from August. That helped fuel the 2.6% gain in nationwide sales, the National Assn. of Realtors said.

Sales rose 6.3% in the Midwest and 2.1% in the South in September from August. Sales were unchanged in the Northeast, an area that enjoyed a 15% jump the month before.

Much of last month’s upswing in home sales came from first-time buyers, said William S. Chee, a real estate broker and president of the National Assn. of Realtors. With both prices and mortgage rates down, many renters now find that it’s actually cheaper to purchase a house than it is to lease an apartment, Chee said.

But the inventory of low-priced “starter” homes is slowly beginning to disappear--even in recession-battered California--and that bodes well for people who are trying to sell more expensive homes.

“Strength in the first-time buyers’ market eventually spills over into the mid-priced market,” Chee said. “That’s good news for people who want to trade up to bigger, more expensive homes because they now have takers for their current homes.”

Times staff writer John O’Dell contributed to this report.

California’s Home Market

Sales of existing homes in California rose sharply in September as median prices continued to decline. Percentage change figures are compared to year-ago results.

Sales rise...(Annual rate in thousands)

Sept. +18.4%

...As prices fall (In thousands)

Sept. -4.3%

Source: California Assn. of Realtors