O.C. Home Resale Prices Dip 0.8% in Third Quarter : Housing: Average was fifth-highest in state at $217,000. California sales slowdown attributed to steadily rising mortgage rates.
Orange County had the fifth-highest home resale prices in the state for the third quarter, an average of $217,000, according to figures released Thursday by the California Assn. of Realtors.
Many Americans took advantage of a strong economy in the third quarter, buying houses despite rising mortgage rates and pushing home values up throughout much of the nation. Home prices in California declined, however, despite an increase in sales.
While California home resales increased 2.5% to 458,900 during the third quarter from a year ago, sales declined 7% from the unusually strong pace of the second quarter, according to a trade group.
Some of the sales slowdown reflected concern about rising interest rates, real estate experts said. Fixed mortgage rates averaged 8.60% during the third quarter, compared to 8.47% in the second quarter and 7.07% in the third quarter of 1993, according to the Federal Home Loan Mortgage Corp.
Adjustable mortgage interest rates averaged 5.53% during the third quarter, compared with 4.46% in the third quarter of 1993.
“Sales activity in the third quarter was in line with our expectations, given the current interest rate environment,” said Ed Albers, a Sacramento realtor and new president of the California Assn. of Realtors.
“Despite the moderate decline in sales from the key spring home-buying season, the sales pace during the third quarter was still at its highest level in five years,” Albers said. “To top it off, it was the fifth consecutive time that quarterly sales have surpassed year-ago levels.”
San Francisco had the most expensive home resale market in the state, averaging $250,200. That was a decline of 1.5% from the third quarter last year. That was followed by Orange County, where prices fell by 0.8%; Los Angeles, $189,000, down 2.9%; San Diego, $175,400, off 0.6%; Riverside, $128,900, down 4.9%; and Sacramento, $121,900, off 5.9%.
“In general, people have not been basing their buying decisions only on interest rates,” said Edmund G. Woods Jr., president of the National Assn. of Realtors.
“They’ve bought because the economy is in good shape, and they felt comfortable making the investment.”
As a result, the real estate group said, on a nationwide basis the median price of single-family existing homes rose 2.7% to $111,000, from $108,100 in the July-September quarter of 1993.
The real estate group said third-quarter sales of existing single-family detached homes, townhouses, apartment condominiums and cooperatives totaled a seasonally adjusted annual rate of 4.4 million, up 2.1% from the July-September period of 1993.
The survey, covering 133 metropolitan statistical areas, found the largest gains in the Pacific Northwest and in the interior Western states. The real estate group is forecasting that the median home price for all of 1994 will rise 3.4% from 1993, to $110,400, and increase by 4.5%, to $120,100, in 1995.