O.C. Home Sales Up 38%; Gain Is Best in Southland : Real estate: Buyers exploiting still-low interest rates and housing prices account for the first-quarter jump.
Orange County home sales shot up 38% during the first three months of 1994, according to figures released Thursday, as buyers rushed to take advantage of low interest rates and still-depressed housing prices.
It was the biggest three-month jump since 1988, and Orange County made the strongest showing in the Southern California region.
The gain was also a dramatic turnaround from the late 1980s and early 1990s, when home sales stalled, real estate values plunged and construction virtually halted in the battered Southern California market.
“Orange County is leading the housing market recovery because we’re a job-rich economy with some of the best housing-affordability levels since the mid-1970s,” said David Chapman, head of real estate research for Kenneth Leventhal & Co., an accounting firm in Newport Beach. “People are now stepping forward to make a major purchase decision.”
A recent rise in interest rates, especially for fixed-rate mortgages, is also nudging potential buyers off the fence and into homes across the region, analysts said.
“What’s happening is people are saying, ‘I don’t want to lose my chance,’ ” said Robert Barnum, president of American Savings Bank, an Irvine mortgage lender.
A total of 7,691 new and existing homes were sold in the county in the first quarter of this year, compared to 5,577 transactions for the first three months of 1993, according to TRW Redi Property Data, a real estate data company in Riverside.
The average price of a Orange County home sold in the first three months of 1994 was $238,846; that is 0.8% less than the average $240,663 price of homes sold in the first quarter of 1993.
The county’s briskest quarterly sales were reported in new-home developments where houses were priced below $250,000, according to the Meyers Group, a real estate consulting firm in Newport Beach.
“Our sales have been fantastic so far this year, better than we expected,” said Valerie Goudie, a sales agent for Kaufman & Broad at California Parke, a 104-home development where prices range from $190,000 to $224,000. “We’re seeing a lot more traffic now that rates are going up, and buyers who have been looking for six months are thinking now is the time to buy.”
For the first time since 1990, would-be buyers have been camping out overnight to be first in line when homes in new developments go on sale, according to the Meyers Group.
At Sunset Ridge, a 141-home development planned in San Clemente, all 11 home lots in Phase 1 sold in two hours on Jan. 15 after some buyers waited as long as six days in campers, said Rick Hernandez, a sales agent for the project. And in the third phase of the development, Hernandez said, one buyer camped out for 12 days.
Across Southern California, sales for the first quarter jumped by more than 23% compared to the same period last year, TRW reported.
“The hike in interest rates in the short term can create a boost in activity. While I don’t think we’re going to have a 40% activity level for the rest of the year, we’re going to have a great year for purchasing homes in Orange County,” Barnum of American Savings said.
The interest rate for fixed mortgages is about 8.8% now, he said, up from about 6.6% in June.
Much of that increase has come in the past two months. The cost of a 30-year fixed-rate mortgage has risen by 1.5 to 2 percentage points since February. Adjustable loan rates have increased slightly and now average 5.1%.
“It remains to be seen how a continued surge in these rates would impact home sales,” said Nima Nattagh, market analyst for TRW. “But Orange County certainly outperformed the other Southern California counties during the first quarter.”
Los Angeles County, still recovering from the effects of January’s Northridge earthquake, reported a 14.1% increase in total home sales during the first quarter but a 14.5% decline in new-home transactions.
In Orange County, the top-selling detached housing community was Bel Air, a Bramalea California Inc. development in Mission Viejo. The project sold 42 homes for the quarter, according to the Meyers Group.
Close behind were the Ridge at Belmont, a Standard Pacific development in Orange, which sold 41 homes; and Kaufman & Broad’s California Parke in Foothill Ranch, also with 41 sales.
Homes Sales Rebound
Orange County home sales for the first three months of 1994 outpaced those for the rest of Southern California. First-quarter sales and resales:
County 1993 1994 % Increase Los Angeles 14,659 16,731 14.1% Orange 5,577 7,691 37.9% Riverside 3,994 5,316 33.1% San Bernardino 4,236 5,208 18.3% San Diego 5,224 6,785 29.9% Ventura 1,612 1,907 22.9% Six-county total 35,302 43,638 23.6%
Source: TRW Redi Property Data; Researched by JANICE L. JONES / Los Angeles Times
