O.C. Home Prices Continue to Rise at a Steady Pace
Orange County’s robust economy and tight housing market pushed median home prices to an all-time high of $247,000 in November, the second record in three months.
If trends continue through this month, home prices in the county would rise an average of 9% for the year, down from last year’s 13% rise in home prices, according to Acxiom/Dataquick Real Estate Systems Inc., a real estate information company.
The November median price rise--based on the market for resale homes, condominiums and newly built homes--is $18,000 higher than a year ago, Acxiom reported. The median price is a widely watched figure that represents the point at which half the homes sold for more and half sold for less.
Last month’s price surpassed the previous record of $245,000, set in September.
Rising prices, however, have not dampened home sales, particularly for condos and new homes. A total of 3,745 homes were sold in November, down 4% from October’s pace but still nearly 5% ahead of the previous November’s activity.
“In fact, this was the strongest November of the decade,” said John Karevoll, an Acxiom analyst.
Overall, the county is on track to sell more than 50,000 homes this year, potentially making it the best sales year since 1989, according to Acxiom.
Despite the new highs, real estate analysts stressed that the county’s residential real estate market does not appear to be overheating. Home appreciation has been rising at a steady pace all year.
“The numbers are strong and sustainable, but not frenzied,” Karevoll said. “Buyers are not overstretching themselves. They are walking away from overpriced homes.”
The median price for existing, single-family homes, which account for the majority of the activity, was $262,500 in November, up about 7% from the previous November.
Condo owners saw the median price of their units rise to $161,250 in November, up 7.5% from a year ago. Median prices for newly built homes hit $340,000 in November, up nearly 12%, according to Acxiom.
A strong local economy, low unemployment and a shortage of available housing are all factors that contribute to the county’s rising home prices, local real estate professionals said. Demand from buyers has remained strong, but the supply of available homes is shrinking.
“There’s not a lot of inventory out there,” said Jeff Lazerson, a mortgage broker at Portfolio Mortgage in Lake Forest.
Rising interest rates this year are fueling much of the activity, as potential home buyers attempt to negotiate the best mortgage deals before rates rise further.
“Every time rates go up, it encourages buyers to make a move,” said Don Woodmancy, real estate agent at Coldwell Banker in Mission Viejo. “I’m noticing that more people are worried about rates.”
Average mortgage rates in Southern California have reacted by increasing a full percentage point this year, to about 7.4%, according to Mortgage News Co.
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Orange County Home Sales
The county’s median home price reached an all-time high of $247,000 in November. Sales, median price and price per square foot for new and resale homes and condominiums, by ZIP Code:
