Median Home: Plunk Down $284,000
Orange County home prices climbed at a torrid pace in October from a year ago, suggesting that the tumult in the stock market and emerging signs of a national economic slowdown have yet to faze the county’s housing market.
October’s prices--marking double-digit percentage gains in every housing category over the past year--also set the stage for robust home sales the last two months of the year, a time when the market typically tapers off.
The median price for homes in Orange County soared 16% from a year earlier, rising $40,000 to a record $284,000, according to a report released Monday by DataQuick Information Systems, a La Jolla research firm. The new high is the seventh record-breaking price in the past 10 months.
Los Angeles County, meantime, recorded its highest median price for any October, rising nearly 10% from a year ago to $203,000, DataQuick reported.
While the Orange County price moved up also from September, the figure for Los Angeles edged down $3,000 from the previous month, a typical pattern of the market pulling back when the weather turns cooler.
Despite signs of a weaker housing market nationwide, the state is benefiting from stronger economic activity. California’s unemployment rate hit an eight-month low in October, according to figures released Monday. A record number of people statewide, more than 16 million, were employed last month.
With solid prospects for further economic growth, analysts said, the region’s housing market should benefit. Consumers, they said, remain confident even though the stock markets have cooled considerably.
“I think we’re due for continued price increases and high sales levels,” said John Karevoll, the DataQuick analyst who prepared the report. “I don’t see anything changing.”
By the end of December, he expects the median price--the point at which half the homes sell for more and half for less--to hit $211,000 in Los Angeles and $293,000 in Orange County.
One reason home sales have climbed, even though fewer people can afford them, is that more people have generated wealth from rising home equity and from the stock market, said G.U. Krueger, an analyst at Institutional Housing Partners, an Irvine real estate venture capital firm.
Many are cashing in stock and options to use as down payments, he said. The so-called wealth effect encourages consumers to spend on houses and other luxury goods, propping up sales, he said.
“It shows why home sales have remained relatively strong,” Krueger said.
There also are more conventional reasons for the higher prices.
Builders, for example, are still struggling to keep up with demand, especially for affordable housing. At the current selling pace, there are enough homes to last only 3.3 months, down from 3.6 months a year ago, according to the California Assn. of Realtors. A nine- to 12-month supply usually keeps prices in check, preventing growth beyond a moderate pace.
But the higher prices may not slow the market as much as expected, said Greg Gotthardt, a partner at Ernst & Young Real Estate Advisory Services in Century City.
“Even though affordability is declining,” he said, “we still are generating enough job growth that’s bringing people to Orange and Los Angeles counties.”
Indeed, the only roadblock appears to be the dearth of listings as sellers start to put their plans on hold until after the holidays, said Patrick Knapp, an agent at Remax Real Estate in Newport Beach.
Increasingly, he said, multiple offers are made on clean properties. But buyers are finding so little to their liking in Orange County that some are paying top dollar on homes that need repairs, he said.
Stephanie Vitaco, an agent at Fred Sands Realtors in Northridge, said homes priced under $250,000 in the San Fernando Valley increasingly have been selling with multiple offers since mid-October.
The two counties recorded higher prices even though the number of homes sold in Orange County grew only 5% to 4,139 units and the number in Los Angeles County fell nearly 2% to 8,940, according to DataQuick.
In Orange County, the median price for new homes grew 29% to $444,000, while resale prices for houses and condominiums each rose nearly 14%, to $295,750 and $182,000, respectively.
In Los Angeles County, new-home prices rose nearly 13% to $291,000, condos jumped 12% to $157,000 and house resale prices increased more than 9% to $210,000..
The monthly mortgage amount in October for a typical Orange County home rose $230 from a year ago to $1,771, assuming a 30-year fixed mortgage at 7.41% interest and a 10% down payment. In Los Angeles, the mortgage rose $98 from a year ago to $1,266, according to DataQuick.
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Price Surge
Median home prices in Los Angeles and Orange counties soared last month from a year earlier, hitting record highs for any October.
O.C. sales, by ZIP Code. B4
