O.C. Home Sales Pick Up for First Time in Months
Orange County’s housing market appears to be brightening, with escrows closing at a fast clip in August and a nine-month decline in sales dramatically tapering off.
Some of the lowest prices in a decade finally appeared to be attracting wary buyers.
Home sales declined 3.3% last month compared to August, 1994, a sharp contrast to the 24% average monthly drop the previous nine months, Dataquick Information Systems reported Wednesday.
But while 3,162 homes closed escrow in August, the most in any month since last September, the median county sales price dropped by 8.7%, to $190,000 from $208,000 a year earlier, said John Karevoll, analyst for the La Jolla-based data firm.
The last time the median home prices were that low was in early 1988.
“I think that we are finally over the hump,” said Orange realtor Dan Slater.
He said the string of disappointing winter and spring months was caused in part by consumer concern in the wake of the county’s December bankruptcy filing. “But I see some confidence coming back. And that and the combination of lower interest rates and lower prices in the late spring and early summer finally brought some people out.”
Real estate agents say that most of the homes on the resale market these days are those that have to be sold--either because the owners are being transferred or because they have run into financial trouble. So seller desperation has tended to push prices lower.
But Slater said that he has started seeing voluntary price cuts as well, indicating that some homeowners--and new-home builders--still have room to come down and that prices could drop even further before they start inching back up.
“I just reduced one home from $209,000 to $189,000,” Slater said. “The sellers said they could afford to do it because the new home they want to buy has come down that much too.”
The rule of thumb in real estate used to be that location was all. Now, Slater said, “people are realizing that price is just about everything in this market.’
August sales figures are not yet available for other Southern California counties, but Karevoll said early reports indicate that sales also picked up considerably in Los Angeles and San Diego counties--where sales volumes and price fluctuations tend to mirror Orange County’s. In July, when Orange County home sales were down 18.4% from a year earlier, sales throughout the six Southern California counties were off 15.3%. Prices, down 3.4% in Orange County in July, were off 4.7% for the region.
Because Dataquick reports on escrows that closed during the month, the August sales total actually looks at transactions that were initiated in May, June and early July. Thus, the report reflects the home prices that existed then.
The report includes all types of single-family homes and condos. Single-family resales make up about 66% of the Orange County market, and August’s report shows that prices in that segment remained fairly stable, falling only 3.3% to a median of $205,000 from $212,000 a year earlier.
The median sales price for a new single-family home during the month dropped to $209,000--down 15.4% from August, 1994. That drop, however, reflects that builders are erecting less expensive house, not that prices of expensive new homes are being slashed.
“Sellers out there are pricing very realistically,” said Wanda Alley, manager of the Seven Gables Real Estate office in Anaheim Hills--one of the hot spots for sales in the county last month. Resale prices haven’t dropped much because most of the fat already has been trimmed, she said.
Like Slater, Alley said she believes the August report shows that consumers are recovering their taste for Orange County real estate after souring on it in the wake of the county bankruptcy.
“People stopped buying because they were concerned about what it meant for the schools and for taxes, but demand finally kicked in,” she said. “People still have to buy houses. So I’m being cautiously optimistic.”
* BY THE NUMBERS: Charts break down sales figures and selling prices. D1
