O.C. New-Home Prices Reach All-Time High

By E. SCOTT RECKARD

April 14, 1998 12 AM PT

TIMES STAFF WRITER

Orange County’s median price for new homes smashed the $300,000 barrier for the first time ever, soaring nearly 32% last month from a year earlier, housing analysts reported Monday.

Heavy demand has caused such a shortage of new homes that experts now believe prices will continue to escalate in the coming months.

Overall, the median price in the county for new and resale housing rose 14.5%, to $221,000, closing in on the all-time high of $223,000 set in June 1991, Acxiom/DataQuick Information Services said.

“If we see another increase next month, even a fraction of this month’s increase, the market on average will have recovered all its lost equity,” DataQuick analyst John Karevoll said.

He cautioned that prices of expensive homes have risen faster than the rest of the market, and many homes still would not sell for what they would have sold for in 1990 or 1991.

A spokesman for the Irvine Co., California’s largest developer of planned communities, said years of job and productivity growth and low inflation have produced more affluent, confident home buyers than anyone predicted.

“Nobody forecasted this kind of demand, and it takes builders awhile to adjust,” Irvine Co. spokesman Paul Kranhold said. “Nobody predicted a 2.8% [Orange County] unemployment rate, and nobody predicted that the stock market would be over 9,000.”

The median price of a new home in Orange County was $301,500 in March, up 31.9% from a year earlier, DataQuick said.

Demand has wiped out so much of the available new housing that sales fell by 5.4% in March, compared with the previous March. In all, 437 new homes were sold last month, down from 462 a year earlier. In the peak years of the late 1980s and early 1990s, more than 1,000 new Orange County homes were sold each month.

In Los Angeles County, where prices peaked at $203,000 in May 1991, March prices averaged $180,000, up 8.4% from a year earlier, Acxiom/DataQuick said.

But sales of new Los Angeles County homes rose 25.7% last month as 484 new homes were sold. In March last year, 385 new units were sold.

Stephanie Ayres, a building industry consultant at the Meyers Group in Irvine, said there just aren’t enough new homes to satisfy Orange County buyers. By her count, 85 new-home projects sold out during the first quarter of the year in the county, and just nine opened to replace them.

That left about three weeks of inventory remaining for sale, she said, compared with seven weeks in Ventura County and 16 weeks in San Diego.

Meyers founder Jeffrey Meyers predicted that the average Orange County home prices will rise 20% this year because of strong demand and short supply. Echoing often-expressed building industry complaints, he blamed city officials and government regulations for over-restricting growth.

“It’s a very efficient way to drive prices up,” Meyers said. “We just can’t supply enough homes.”

El Nino storms delayed some construction projects, playing a part in cutting the supply of new homes, builders said.

“We’ve been probably affected by at least 60 days,” said William R. Watt, president of Baywood Development Group in Newport Beach, which is building homes in the $200,000 range at Tustin Ranch and Rancho Santa Margarita.

“It will probably run into the summer before everyone catches up--90 to 100 days, I would think,” he said.

With prices rising sharply, questions of affordability inevitably arise.

But California Assn. of Realtors figures show that 38% of Orange County households still earn enough to pay for a median-priced home in the county, assuming a 20% down payment. The trade group’s formula takes into account median household income but not equity in previously owned homes.

In Los Angeles County, the figure is 39%, said G.U. Krueger, an economist for the trade group.

Before Southern California’s housing bubble burst early this decade, the affordability figure was in the teens. And interest rates then were in the 9% range instead of 7%, Meyers said.

“When affordability levels get in the 20% range, it’s time to start worrying,” he said.

* HOUSING OVERVIEW

Chart details Orange County home sales by ZIP Code. D1

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Orange County Home Sales

March home sales jumped to 4,061, a 32.5% increase from 3,065 one year ago. The median price of $221,000 was the highest for any month since the July 1991 median of $222,000. (See story, A1.) Sales of new and resale homes and condominiums, by ZIP Code:

*--*

March Pct. March Pct. High Community, Zip Sales Chng. Median Chng. Price Aliso Viejo 92656 134 20.7% $174,000 -4.4% $381,500 Anaheim 92801 26 -16.1% $139,250 -5.9% $206,500 Anaheim 92802 28 12.0% $157,000 -0.6% $208,000 Anaheim 92804 53 12.8% $164,000 6.5% $230,000 Anaheim 92805 38 35.7% $151,750 13.7% $238,000 Anaheim 92806 27 68.8% $190,000 12.8% $224,000 Anaheim 92807 75 23.0% $226,000 3.0% $390,000 Anaheim 92808 55 77.4% $243,000 5.9% $557,500 Brea 92821 41 20.6% $210,500 -4.3% $1,569,000 Buena Park 90620 44 -10.2% $171,000 10.3% $313,000 Buena Park 90621 34 88.9% $136,250 -19.4% $365,000 Corona del Mar 92625 41 57.7% $585,000 2.6% $1,790,000 Costa Mesa 92626 48 50.0% $209,500 5.7% $405,000 Costa Mesa 92627 70 105.9% $220,000 20.2% $389,500 Cypress 90630 52 -5.5% $178,000 -2.7% $420,000 Dana Point 92624 15 87.5% $325,000 19.7% $1,375,000 Dana Point 92629 56 5.7% $273,000 14.7% $1,037,000 Foothill Ranch 92610 35 -22.2% $236,000 18.9% $460,000 Fountain Valley 92708 78 95.0% $240,000 9.3% $460,000 Fullerton 92831 47 147.4% $185,000 15.6% $425,000 Fullerton 92832 15 87.5% $160,000 6.7% $274,500 Fullerton 92833 51 54.5% $167,750 0.1% $430,000 Fullerton 92835 41 78.3% $240,000 11.1% $530,000 Garden Grove 92840 47 62.1% $150,000 -3.8% $238,000 Garden Grove 92841 25 56.3% $167,000 7.2% $310,000 Garden Grove 92843 32 77.8% $147,000 8.9% $230,000 Garden Grove 92844 14 -22.2% $105,000 -22.9% $159,000 Garden Grove 92845 30 87.5% $200,000 17.1% $270,000 Huntington Beach 92646 82 18.8% $232,000 11.1% $620,000 Huntington Beach 92647 64 42.2% $218,750 7.8% $590,000 Huntington Beach 92648 112 143.5% $344,500 37.4% $921,000 Huntington Beach 92649 69 23.2% $274,000 23.2% $900,000 Irvine 92604 50 127.3% $225,250 3.3% $525,000 Irvine 92606 35 -25.5% $291,000 15.6% $479,000 Irvine 92612 61 38.6% $235,000 -0.2% $892,000 Irvine 92614 49 81.5% $243,750 35.4% $790,000 Irvine 92620 62 93.8% $234,000 7.1% $512,000 La Habra 90631 50 56.3% $164,750 19.4% $390,000 La Palma 90623 21 90.9% $242,000 14.7% $365,000 Laguna Beach 92651 55 52.8% $502,000 32.8% $3,200,000 Laguna Hills 92653 103 22.6% $198,500 36.0% $900,000 Laguna Niguel 92677 183 22.8% $265,000 7.4% $1,300,000 Lake Forest 92630 105 40.0% $210,000 9.7% $485,000 Los Alamitos 90720 14 -22.2% $340,000 16.4% $505,000 Mission Viejo 92691 108 63.6% $218,500 15.0% $480,000 Mission Viejo 92692 126 85.3% $268,000 39.2% $1,650,000 Newport Beach 92657 20 185.7% $540,000 52.3% $1,052,500 Newport Beach 92660 74 76.2% $505,000 23.2% $2,175,000 Newport Beach 92661 4 -33.3% $699,500 -36.8% $875,000 Newport Beach 92663 40 81.8% $376,000 9.0% $800,000 Orange 92865 21 75.0% $188,000 -2.0% $254,000 Orange 92866 13 -27.8% $185,000 -3.4% $240,000 Orange 92867 39 18.2% $241,500 6.4% $650,000 Orange 92868 15 200.0% $140,000 18.6% $194,000 Orange 92869 74 39.6% $265,750 15.5% $965,000 Placentia 92870 61 19.6% $210,000 5.4% $360,000 R. Santa Margarita 92688 150 22.0% $190,500 6.7% $464,500 S. Juan Capistrano 92675 52 2.0% $266,500 54.5% $1,287,000 San Clemente 92672 65 41.3% $250,250 25.1% $825,000 San Clemente 92673 33 43.5% $325,000 4.8% $629,000 Santa Ana 92701 21 -41.7% $115,000 19.0% $168,500 Santa Ana 92703 35 -5.4% $112,000 -3.4% $260,500 Santa Ana 92704 60 0.0% $141,250 2.5% $232,000 Santa Ana* 92705 62 51.2% $305,000 17.3% $885,000 Santa Ana 92706 34 25.9% $172,000 5.5% $378,000 Santa Ana 92707 43 0.0% $140,000 1.4% $237,500 Seal Beach 90740 18 12.5% $325,000 2.4% $750,000 Stanton 90680 26 44.4% $137,500 34.5% $580,000 Trabuco/Coto 92679 80 -10.1% $280,000 9.8% $780,000 Tustin 92780 56 21.7% $215,000 22.9% $350,000 Tustin 92782 47 147.4% $230,000 -19.3% $775,000 Villa Park 92861 11 83.3% $455,000 6.1% $630,000 Westminster 92683 61 13.0% $175,000 6.1% $625,000 Yorba Linda 92886 81 76.1% $270,000 11.3% $571,000 Yorba Linda 92887 50 19.0% $305,500 10.1% $633,000 Others 114 Q Q Q Q Countywide 4,061 32.5% $221,000 14.5% $3,200,000

Homes Entering Community, Zip Foreclosure Aliso Viejo 92656 15 Anaheim 92801 19 Anaheim 92802 10 Anaheim 92804 26 Anaheim 92805 21 Anaheim 92806 8 Anaheim 92807 10 Anaheim 92808 8 Brea 92821 10 Buena Park 90620 30 Buena Park 90621 5 Corona del Mar 92625 1 Costa Mesa 92626 6 Costa Mesa 92627 6 Cypress 90630 11 Dana Point 92624 0 Dana Point 92629 5 Foothill Ranch 92610 5 Fountain Valley 92708 9 Fullerton 92831 4 Fullerton 92832 8 Fullerton 92833 6 Fullerton 92835 11 Garden Grove 92840 13 Garden Grove 92841 15 Garden Grove 92843 19 Garden Grove 92844 8 Garden Grove 92845 8 Huntington Beach 92646 16 Huntington Beach 92647 11 Huntington Beach 92648 6 Huntington Beach 92649 4 Irvine 92604 6 Irvine 92606 1 Irvine 92612 13 Irvine 92614 11 Irvine 92620 4 La Habra 90631 28 La Palma 90623 5 Laguna Beach 92651 11 Laguna Hills 92653 14 Laguna Niguel 92677 18 Lake Forest 92630 19 Los Alamitos 90720 4 Mission Viejo 92691 24 Mission Viejo 92692 15 Newport Beach 92657 0 Newport Beach 92660 4 Newport Beach 92661 0 Newport Beach 92663 9 Orange 92865 3 Orange 92866 0 Orange 92867 9 Orange 92868 13 Orange 92869 4 Placentia 92870 15 R. Santa Margarita 92688 25 S. Juan Capistrano 92675 13 San Clemente 92672 6 San Clemente 92673 1 Santa Ana 92701 18 Santa Ana 92703 24 Santa Ana 92704 33 Santa Ana* 92705 19 Santa Ana 92706 9 Santa Ana 92707 29 Seal Beach 90740 3 Stanton 90680 9 Trabuco/Coto 92679 14 Tustin 92780 18 Tustin 92782 4 Villa Park 92861 3 Westminster 92683 28 Yorba Linda 92886 11 Yorba Linda 92887 8 Others 15 Countywide 824

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*Includes Lemon/Cowan Heights

Sales, Price Trends

Monthly Sales

March 1998: 4,061

Median Price

March 1998: $221,000

March Sales

1998: 4,061

March Median Prices

1998: $221,000

Source: Acxiom/DataQuick Information Systems; Researched by JANICE JONES DODDS/ Los Angeles Times