Rising New-Home Prices Slow Sales by 13% From Last Year

As new-home prices in Orange County continue to go up, sales are slowing down, according to a real estate research group.

In the three months ended in mid-March, sales lagged 13% behind transactions in the same period a year ago, the Meyers Group of Irvine said in its latest quarterly report. “We believe pricing . . . is influencing buyers to think more carefully about a new-home purchase in Orange County,” Meyers analyst Lorry Lynn said. Indeed, tight inventories drove up the median price of new detached homes by 8% to $340,900 in the period. For condos and townhomes, the median price--meaning half cost more, half cost less--stood at $215,990, a 31% increase over the same period a year earlier.

Builders spent much of last year trying to raise production to meet surging demand, and their efforts are starting to pay off. New-home inventories rose 14% over the previous quarter--giving builders a still snug 11-week supply at the current sales pace, Lynn said.

But with master-planned communities in south Orange County such as Talega, Ladera and Northpark scheduled to open thousands of homes later this year, demand for new homes may continue to slow, Lynn said. “We are not experiencing the same intense imbalance we had last year,” she noted.