O.C. October Home Sales Up 3.1%

Continuing a rebound that began last year, home sales in Orange County rose 3.1% in October with sales of existing homes leading the way and opening the door for improved new-home sales in coming months.

The median selling price for the month rose 1.1% to $191,000 from $189,000 a year earlier, La Jolla-based DataQuick Information Services said in its monthly real estate report issued Wednesday. A soft market for condominiums, where the median price dropped by $3,000 per unit last month, continues to dampen overall prices, according to the company.

A total of 2,894 homes were sold last month, making it the busiest October in five years and the 10th consecutive month of year-to-year sales increases. With 30,509 sales recorded through October, Realtors and builders have sold almost as many homes in the first 10 months this year as in all of 1995.

Real estate specialists say they were heartened by sales of existing single-family homes, which rose 4.9% for the month and accounted for more than two-thirds of all sales.

The market for existing homes drives new home sales. If people cannot sell their existing homes for a profit, they have no equity to make down payments on new houses or on larger, more expensive resale homes.

“We are seeing, finally, that homes are being put on the market by people who don’t have to sell, and that means they are getting equity out of their homes,” DataQuick analyst John Karevoll said.

That equity, along with increasing job opportunities that are bringing more home buyers into the county, is fueling a resurgence of “move-up” home sales in the $500,000-and-up market, said Wanda Alley, managing broker at Seven Gables Real Estate in Anaheim Hills.

So far this year, according to state Employment Development Department figures, employers in Orange County have added more than 20,000 jobs to their payrolls.

This also is the first year since 1989 in which people from out of the area who are looking to buy homes in Southern California outnumber local homeowners who want to sell and move away, say officials with the California Assn. of Realtors.

“There are a lot of quality buyers out there who have perceived that the market really has bottomed out and that prices are probably as low as they are going to get,” Alley said. Sellers are beginning to list homes they’ve hung onto through five years of a weak real estate market and are using the profits to clinch deals on larger homes--new and resale--before those prices start climbing, she said.

“Our big problem now is that there is a shortage of inventory, particularly in the $375,000-to-$500,000 price range,” said Alley, adding that she expects sales to continue to be strong through the end of the year.

The lower end of the market, however, is still where most of the action is. The median price of new homes sold in October rose 4.4% to $225,000, while the median for existing single-family homes increased 1% to $199,000. The median price for existing condominiums fell 2.4% to $122,000. The median is the point at which half the homes in the market sold for more and half sold for less.

Of the 2,894 sales in October, 1,920 involved existing single-family homes. Resale condos accounted for 444 sales, up 1.6% from 437 a year earlier, and 485 new homes and condos were sold, a 2% drop from sales of 495 new units in October 1995.

The transactions reflect completed sales of homes that went into escrow from late July through early September.