O.C. Median Home Price Surges to Record $241,000
Orange County’s median home price soared to an all-time high of $241,000 last month, eclipsing the previous record by $5,000 and setting the stage for a blazing summer market.
With mortgage rates relatively low and the county’s strong economy generating more jobs, all signs point to continued price gains, as the housing market enters what is traditionally its busiest season of the year, analysts said.
The price surge in Orange County, which usually leads Southern California in sales and price trends, may bode well for thousands of Southland homeowners who bought at the peak of the last real estate cycle and have seen their property values recover at a slower rate.
John Karevoll, who prepared the monthly housing report, was one of the most bullish, predicting that the demand for housing could drive the median price in Orange County as high as $260,000 later this year. The median price means half the houses cost more and half cost less.
“It sounds almost crass because the median is at such an astonishingly high level, but it could still go up quite a bit more,” said Karevoll, with Acxiom/Dataquick Real Estate Inc.
May home prices rose 6.6% over the previous May, the 24th consecutive month that the market has chalked up gains over the same month of the previous year.
Prices for the existing homes and condominiums segments, which account for about 85% of home sales, climbed to record highs last month.
The typical price of an existing home climbed to $262,000, up $10,000 in just one month. The median price for a condo rose $3,000 to $163,000.
Sales remained brisk, but failed to match the frenzied pace of a year ago.
Buyers snapped up 4,275 homes last month, the second-highest volume in May for this decade. The sales pace trailed only the 4,507 transactions recorded a year ago.
But agents warned that the sales pace might be hard to sustain in coming months. One factor: Owners are seeking exorbitant prices when they put their homes on the market in an effort to cash in on the price surge.
Patrick Knapp at ReMax Real Estate Services in Newport Beach said he routinely sees homes coming onto the market that are 10% or more above comparable sales prices. Now, potential buyers are beginning to balk at paying such high premiums, he said.
Recently, he said, he took over a listing for a home that had languished on the market at $425,000. He suggested the owners cut the price to $399,000, and within days the home drew two offers.
“We’re finding more sellers out there,” Knapp said. “But I’m seeing the number of homes stacking up somewhat.”
Still, buyers far outnumber homes on the market, analysts said. Over the last month, the supply of homes grew by 8%, which works out to be a little more than a three-month inventory, which isn’t high enough to prevent prices from moving up, said Patrick Veling, who heads Dynamic Marketing Resources Inc. in Fullerton. A backlog of 5 1/2 to seven months is normal.
Potential buyers have been showing up in droves at new home projects, builders said. Brookfield Homes expected 400 people to show up last weekend for a tour of homes under construction in the $400,000-$500,000 price range at Ladera Ranch. Despite little promotion, about 900 people showed up, said Jeffrey Prostor, who heads up Brookfield Homes in Orange County.
