Condo Sales Fuel a Heated Home Market
Unfazed by El Nino’s torrents, Southern California’s relentless home buyers are snapping up more condominiums and other less expensive homes, further stoking the hot housing market, real estate analysts said Thursday.
With home prices surging from San Diego to Ventura to the Inland Empire, the condominium market has emerged from a lengthy slump, reflecting increased interest among people at all income levels in buying a home, analysts said.
The trend has been most pronounced in Orange County, where condo sales ratcheted up more than 26% last month while prices climbed 16%, outpacing the increase in the market overall, according to Acxiom/DataQuick Information Services, which tracks real estate transactions.
In Los Angeles County, condo sales and prices were still moving up more slowly than the overall market, DataQuick reported. The median price for all homes sold in the county rose 6.1% to $173,000, while sales climbed 18.3%. Condo prices throughout the county rose 4.9% to a median $150,000, while sales were up nearly 13% from condo transactions a year ago, DataQuick reported.
But the condominium market on the Westside was sizzling.
Rick Mitchell, a John Aaroe & Associates agent in Brentwood, said he has more buyers as clients now than at any time in the last 20 years.
“If a buyer hesitates for a moment on a property, they’re going to lose it,” Mitchell said. “No one cares what’s going on in Asia or what’s happening to Clinton. Things are great here now, and that’s what’s important to buyers.” While most buyers still prefer detached homes, demand for condominiums is growing among single people and professional couples without children, Mitchell said.
Analysts say heavy demand for high-end homes helped spur the housing market’s recovery last year. Now, the hot market is starting to put detached homes out of reach of some buyers just as interest in home purchases intensifies among people at all income levels.
In another indicator of the growing demand for less expensive homes, such as condos, DataQuick analyst John Karevoll said home prices in all segments of the market are moving up equally fast. Six months ago, prices of expensive Southern California homes were rising twice as fast as those at the market’s lower end.
Several Orange County areas were also experiencing brisk condo sales.
In Corona del Mar, where demand for condominiums has been sluggish for years, the market is “almost on fire,” said real estate agent Lynn Noah of Coast Newport Properties. “I can’t hold a listing for a week.”
The condo buyers in that upscale section of Newport Beach are paying $300,000 to $500,000 for condos because they can no longer find detached homes in that price range, Noah said.
In the inland Orange County community of Portola Hills, two condominiums that sold six months ago for less than $100,000 resold in the last month for almost $120,000, said Mary Shockey, manager of Century 21 Beachside in Laguna Niguel.
Ken Agid of the Marketing Department in Irvine, a consultant to the high-density housing projects that are part of Los Angeles’ budding Playa Vista project, said attached homes will play an increasing role in the region’s housing, particularly as the pent-up demand for expensive “trade-ups” plays out.
“We’re coming to an era of limits in Los Angeles and throughout Southern California,” Agid said, “and we’re going to have to start thinking outside the envelope if we want to supply housing for people making $40,000 or $50,000 or $60,000.”
