O.C. Home Prices Hit Another Record in June
Confident home buyers in Orange and Los Angeles counties shrugged off rising interest rates and signs of slowing sales nationwide to create one of the busiest sales periods ever last month, pushing prices to record levels.
The typical price for an Orange County home rose 13% from a year earlier to $273,000, the eighth time in 13 months that prices have set a record, according to a monthly report released Monday by DataQuick Information Systems Inc., a La Jolla research firm.
In Los Angeles County, the median home price climbed back to
match the all-time high of $203,000 achieved in May 1991 before the long recession wiped out 25% of the county’s housing value, DataQuick reported.
“Everyone’s been expecting the market to taper off, but the numbers clearly indicate that the market is still strong,” said John Karevoll, the DataQuick analyst who conducted the study.
Or, as economist Jack Kyser at the Los Angeles Economic Development Corp. put it: “Declining unemployment, reports of labor shortages and home prices going up: If it’s not nirvana, it’s pretty close.”
Karevoll predicted that the overall median price, the point at which half of the homes cost more and half cost less, will be $285,000 in Orange County by December and $215,000 in Los Angeles.
The number of Orange County homes sold remained flat, growing less than 1% to 5,167 over strong sales in June last year. Last month’s amount was the seventh-highest DataQuick has recorded since it started compiling records in 1988. June is typically one of the strongest home-buying months of the year.
In Los Angeles County, sales jumped more than 7% to 11,383, the highest level in nearly 11 years, DataQuick said.
Despite higher prices, buyers are still in the market, trying to lock up a deal before interest rates rise again, said Esmael Adibi, a Chapman University economist. Rates have gone up six times in the past year, but with the stock market rebounding a bit, people feel more confident about buying homes, Adibi said.
Real estate brokers say the market still favors sellers. Stretching their asking prices, homeowners in many neighborhoods are continuing to sell their homes quickly, brokers said.
“We have such little inventory that what’s on the market is selling, and selling at a higher price,” said Valerie Torelli, who owns a realty firm in Costa Mesa.
In some areas, she said, multiple offers are growing more common.
A house in the Mesa Verde area of Costa Mesa, for example, sold for more than $400,000 last week after attracting four offers. Within days, a neighbor also decided to sell. Torelli said she called one of the unsuccessful bidders, who was eager to buy the neighbor’s home before it was listed on the market--and paid the full asking price.
Realtors call the market steady, not frenzied. Examples of multiple bids, for instance, have been fewer than agent Michael Dreyfuss would have imagined during the peak selling season in Newport Beach.
Buyers are doing more research and looking to pay close to comparable sales prices of nearby homes, not 15% to 20% more, he said.
“If you price a house within reason, it will sell,” said Dreyfus, an agent at Prudential California Realty in Corona del Mar. “But if you push the price, it sits there.”
Sales of smaller and mid-size homes gained sharply in the Los Angeles market last month, boosting sales but curbing prices overall, Karevoll said. Had fewer smaller homes been sold, the median price would have climbed higher, he said.
Just the opposite occurred in Orange County, where larger homes have boosted sales figures and led the county to shatter four overall median price records in six months. Since January, median prices on homes 2,500 square feet or larger have risen more than 11% in the county. But prices for homes less than 1,000 square feet also have increased, by 7.5%.
Barring an economic collapse or significantly higher interest rates, analysts said, the market should remain strong.
“All indications were that buyers would be getting skittish from prices or interest rates or tight availability” in the local market, Karevoll said. “But we’re not seeing any signs of thin ice here.”
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* HOME SALES
A ZIP Code-by-ZIP Code look at home sales and prices in Orange County. B4
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Orange County Home Sales
Orange County’s median home price rose to $273,000 in June, a 13% increase from a year ago. Sales totaled 5,167, rising 1% over last year. See story, A1.
