O.C. Housing Market Still Robust in June
Orange County’s housing market remained in high gear last month, as the median home price matched the all-time high of $241,000 set in May and the price of a typical existing home surged to a new high of $265,000, a real estate research firm reported Wednesday.
Buyers snapped up homes and condominiums in record numbers during the month, reflecting the historically low interest rates and soaring consumer confidence that have drawn consumers like moths to light.
A total of 5,129 new and existing homes and condominiums sold last month, the busiest June since the research firm Acxiom/DataQuick Information Systems began tracking the market in 1988.
Although up against a banner month a year ago, home prices moved up 2.1%, or $5,000, from the median price in June 1998. It was the 25th consecutive month that the market has shown year-to-year price gains.
Nonetheless, real estate agents said the current market is a bit calmer than the frenzied environment a year ago, when 5,098 homes sold and generally attracted multiple offers during what is traditionally one of the busiest months of the year. But analysts said the housing market is merely catching its breath before launching into another sprint.
“There’s still nothing that indicates any change of course or any slowing down,” said John Karevoll, an analyst at La Jolla-based Acxiom/DataQuick. “All the curves on the graph point straight ahead.”
Unlike during the housing boom in the late 1980s, Karevoll added, potential buyers now are willing to walk away from houses they view as overpriced. Part of the reason, he said, is that prices generally are rising at a steady--rather than galloping--pace, leaving consumers with the impression that they can enter the market later, without being priced out. As a result, there’s less impetus to buy now.
In the Huntington Beach-Newport Beach area, a real estate agent said, the market remains orderly even though the number of homes on the market has dropped by about a third and new homes are being snapped up before completion--conditions that normally would create a frenzied atmosphere.
Properties seem to be selling more slowly than a year ago, and only homes with the best locations and best prices are generating multiple offers, said Dave Macleod, an agent at Century 21 Beachside in Huntington Beach.
“Everybody’s looking, but maybe prices are at a point where people are hesitant about making the jump,” Macleod said. Indeed, he added, homeowners may be hesitant to sell because they would end up paying top dollar for new homes.
Home buyers and sellers “are not sure if we’ve reached the peak or if more appreciation is coming,” he said.
With mortgage rates edging up, housing costs have edged up, but not enough to dampen demand measurably, analysts said.
On a typical 1,500-square-foot home priced at the median $241,000, with a 30-year fixed-rate mortgage, the monthly payment is $1,312, the highest rate since 1994, Karevoll said. But that amount still is about $300 a month less than the typical payment during the last boom, a decade ago.
Prices of previously owned homes moved up 5% to the record $265,000 in June, while condominium prices edged up 3% to $160,000. New-home prices fell 11% to $296,000, a temporary blip that will be reversed in coming months as higher-priced housing in new communities comes on the market, Karevoll said.
Indeed, more top-end homes--those priced at $500,000 or more--were sold last month than ever before, Karevoll said. A total of 483 of these homes sold during the month, up 12% from the same month a year ago.
The median price per square foot, considered a truer reflection of the rising market, rose in June to a record $158, up 9% from a year ago, Karevoll noted.
With the county recording strong job growth and home builders unable to keep up with demand, home prices could continue to hit new peaks well into next year, Karevoll said.
He expects monthly prices to move up 8% to 12% over those of the year-earlier periods at least through the end of the year, which would push the price of a typical home to about $260,000.
“There’s nothing we see emerging that will change the forecast much,” Karevoll said.
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Orange County Home Sales
The hot home-sale season began in earnest in June, with 5,129 transactions. That’s 20% more than May and slightly higher than last June. The median price equaled May’s all-time high of $241,000. Sales, median prices of new and resale homes and condominiums and median price per square foot, by ZIP code:
Sales, Price Trends
1998
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Monthly Median sales price June 5,098 $236,000 July 5,259 $229,000 Aug. 4,710 $230,000 Sept. 4,331 $227,000 Oct. 3,913 $230,000 Nov. 3,578 $229,000 Dec. 4,330 $236,000 1999 Jan. 2,804 $231,000 Feb. 3,002 $226,000 Mar. 4,446 $232,000 April 4,658 $232,000 May 4,275 $241,000 June 5,129 $241,000
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June June median sales prices 1995 3,100 $199,000 1996 3,523 $197,000 1997 3,726 $201,000 1998 5,098 $236,000 1999 5,129 $241,000
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Source: Acxiom/Dataquick
