Slump in O.C. Housing Market May Be Ending : Real estate: November figures show a major year-to-year increase in the number of units sold. Median price still sags.
Builders and realtors in Orange County have been saying it for several months, and now the numbers are starting to show it: County home sales are increasing substantially and some experts suggest the market could be lumbering out of its four-year slump.
The latest data, from La Jolla-based DataQuick Information Systems, has the Orange County resale market leading Southern California with a 29.5% increase in November home sales compared with November, 1992.
That translates to 1,677 detached homes and 419 condominiums, up from 1,304 houses and 314 condos a year earlier.
Though the actual number of sales still is small--the increase is only 478 units--November is the sixth consecutive month that sales have increased from the previous year, according to DataQuick calculations. And the Construction Industry Research Board reported last month that the number of permits received by new home builders in the county had risen for five consecutive months.
New homes sales in Orange County tend to be pushed by resales--people use the equity from selling an older home to make the down payment on a new one--and the parallel increases are seen as a sign of returning health in the long-moribund housing market.
A combination of pent-up demand, steadily falling prices and low interest rates has been driving the sales splurge, said DataQuick analyst John Karevoll.
The median price of a resale home in the county last month was $216,000--down about 1% from $218,000 in November, 1992, and fixed interest rates for conventional loans have been hovering around 7.25%. Therefore, monthly mortgage payments for that median-priced home would be about $1,173, Karevoll said.
That’s $400 less than they would have been in November, 1990, when the median price was $223,500 and interest rates were about 10%.
“We’re still seeing a lot of first-time buyers” who are looking for smaller homes in the under-$225,000 price ranges, said Chris Lyon, broker-manager of First Team Real Estate in Irvine. “But there are a lot more move-up buyers than in the past. I don’t know if it’s a trend yet, but we are seeing some of the larger, more expensive homes starting to sell again.”
Sales in the six-county Southern California area rose 24% in November, to 15,744 units from 12,869 a year earlier. The hikes ranged from Orange County’s 29.5% to 4.4% in Riverside County, where 908 homes and condos were sold.
As prices have fallen in Orange County, typically the highest-priced market in Southern California, buyers who once were forced into the Inland Empire and North San Diego County to find affordable housing have started moving back, realtors say.
“A lot of buyers would like to hit the market at its low point, and the perception is that we’re near or at the bottom,” said Donald L. Cohn, DataQuick’s chief executive. “Prices will probably go down for a while longer, but it’s not likely that interest rates will get much lower,” he said.
The DataQuick sales figures include all so-called “arms-length” transactions between unrelated parties. Sales to immediate family members and transfers of ownership to trusts are not counted. The sales are those that are recorded during the month at the various county recorder’s offices at the close of escrow, which means that they reflect sales contracts that were opened in September and October.
Karevoll said that the median size of homes sold in Orange County in November had risen to 1,640 square feet from 1,580 a year earlier--indicating that move-up buyers seeking larger homes are starting to come back into the market.
Home Sales Volume Increases While Prices Drop
November sales of both single-family homes and condominiums in Orange County improved considerably from November, 1992. At the same time, though, median sale prices dipped for both forms of housing. Median prices are in thousands of dollars:
SINGLE-FAMILY HOMES
Sales Median Pric County Nov. ’92 Nov. ’93 % chg. Nov. ’92 Nov. ’93 Los Angeles 3,860 3,943 2.2 $190 $180 Orange 1,304 1,677 28.6 218 216 San Diego 1,435 1,556 8.4 176 174 Riverside 770 785 1.9 129 128 San Bernardino 1,005 1,081 7.6 127 125 Ventura 429 511 19.1 205 203 Southern California 8,803 9,553 8.5 180 176
e County % chg. Los Angeles -5.3 Orange -0.9 San Diego -1.1 Riverside -0.8 San Bernardino -1.6 Ventura -1.0 Southern California -2.2
CONDOMINIUMS
Sales Median Pric County Nov. ’92 Nov. ’93 % chg. Nov. ’92 Nov. ’93 Los Angeles 646 840 30.0 $155 $160 Orange 314 419 33.4 148 142 San Diego 415 430 3.6 125 122 Riverside 100 123 23.0 145 118 San Bernardino 71 78 9.9 114 100 Ventura 103 103 0.0 149 150 Southern California 1,649 1,993 20.9 143 143
e County % chg. Los Angeles 3.2 Orange -4.1 San Diego -2.4 Riverside -18.6 San Bernardino -12.3 Ventura 0.7 Southern California 0.0
Source: DataQuick Information Systems; Researched by JANICE L. JONES / Los Angeles Times
