Spurt in Large-Home Sales Ends, Cooling Median Price
The median price of a new, detached home in Orange County decreased 4% in the third quarter to $355,990, not because of falling values but because a spike in sales of large homes ended, a survey shows.
For detached homes, the median size fell to 2,478 square feet from 2,698 in the previous quarter, according to the Meyers Group Consulting Services LLC, which publishes a quarterly survey.
Sales of large, high-end homes surged last quarter, inflating median sizes to a level that couldn’t be sustained, said Stephanie Ayres, a senior consultant at the firm. As a result, more moderate-sized homes were sold in this last quarter. Condominium prices also dropped 14% to $175,990 as the size of the units that were sold diminished to 1,200 square feet from 1,400.
But in a sign of the market’s underlying strength, the price per square foot for houses and condos was the highest in the third quarter since the company began tracking new-home sales in Orange County in 1988. Detached homes sold at $149 per square foot, while the price for attached homes was $146.
Still, inventories of new homes remains far behind demand in Orange County, one of the nation’s hottest real estate markets. Currently, there is a five-week supply, down from a seven-week supply a year ago, and from a 12-week supply in 1996.
The firm expects that with continued job growth, demand for new homes will remain strong. Although the rate of price increases will slow down from the previous quarter’s record high, “the imbalance of supply and demand will continue to put upward pressure on home prices,” the firm said.
