Median O.C. Home Resale Price Hits Record $300,000

The median price for an existing single-family home in Orange County last month hit $300,000 for the first time, helping drive overall prices to another record high, according to a report released Monday.

The surge, which was expected at some point this fall, helped boost the median price for all single-family homes and condominiums sold last month--new and existing--by more than 13% from a year earlier, to $277,000. That gives the county its sixth record home price in the past nine months.

“The question I’m asking myself is: When is it going to stop?” said Pablo Velasquez, co-owner of Advance Realty in Santa Ana.

The upward spiral of prices means housing is becoming less af

fordable and more people may be forced to move outside the county, to Los Angeles County or the Inland Empire, where average prices are substantially lower. In fact, that may be a big reason the number of homes sold in Orange County slipped last month from September 1999. Home values could soften as well, economists said, if job growth weakens significantly in coming months.

“It’s getting harder and harder for families to afford a home in Orange County, and that’s what we’re worried about,” said Esmael Adibi, an economics professor at Chapman University in Orange.

If residents flee from high housing costs, jobs may soon follow, and the county’s financial health would suffer, economists said.

Velasquez already is seeing the consequences. He said he now spends two weeks a month in the Inland Empire communities of Corona or Chino Hills showing homes to Orange County clients. Once he shows them what $300,000 buys there, they decide to move out of the county, he said.

Affordability is the “single most important factor right now that will slow our market,” said Kristen Fowler, a real estate agent at Coldwell Banker Yorba Linda.

Apartment rents are at record highs, too, and that means potential home buyers are paying more for housing, cutting into their savings for a future down payment on a house or condominium.

Said Fowler: “If housing is not affordable for the masses, we won’t have enough buyers to go around.”

Median prices, at which half the homes are sold for more and half for less, also are hitting record highs in Los Angeles County. The median price of houses and condominiums rose 10% to $206,000 last month, according to the report by DataQuick Information Systems, a La Jolla research firm.

The price surpassed the previous high of $205,000 in August, and analysts said home appreciation appears to be spread more widely throughout Los Angeles County.

In Orange County, strong price gains in the resale market was behind the one-month gain. Orange County’s median price is the highest in the Southland.

Last month, sales dropped 6% in Orange County and 5% in Los Angeles County.

In recent months, the tight inventory of affordable homes has contributed to lower sales activity, skewing the market more toward pricier and new homes and, hence, somewhat inflating overall median prices.

John Karevoll, the DataQuick analyst who compiled Monday’s housing report, doesn’t see a softening in Southland housing prices. “There’s no sign of any slowdown,” he said.

Last year’s figures were boosted from demand that carried over from the recession in the early- to mid-1990s, he said. But the market today is growing from the enduring strength of the economy. The pace can continue, barring an economic collapse, he said.

Confidence in the economy and the housing market, though, could be swayed in coming months by rising oil prices, increased volatility in the stock market and rising tension in the Middle East, said Leslie Appleton-Young, chief economist for the California Assn. of Realtors trade group.

“Unless those risk factors become dominant,” Appleton-Young said, “the market will still be very strong.”

Homes are selling quicker, changing hands in about 30 days compared with 40 days during the same period last year, she said. That indicates there is high demand for homes, she said.

Moreover, the number of homes on the market at the current selling pace would last for only 3.4 months, down from 3.7 months a year ago, pushing prices up. It would take a 10- to 12-month supply to make for a balanced market that keeps prices in check.

A breakdown of the overall figures shows that in Orange County, new-home prices rose 17% to $400,500 last month from the year-earlier September, followed by existing-home prices rising 15.4% to $300,000 and existing-condominium prices jumping 6.7% to $175,000, according to DataQuick.

In Los Angeles County, prices rose 20% to $300,000 for new homes, 9.2% to $213,000 for existing homes and 10% to $160,000 for existing condominiums.

The number of homes sold in Orange County dropped to 4,171 last month from 4,450 in September 1999. In Los Angeles County, sales fell to 9,415 from 9,953 a year earlier.

Analysts attributed the drop in homes sold to rising prices, declining numbers of people who can afford typical homes and a shrinking base of homes on the market. DataQuick noted that sales also were affected slightly by one less business day in September than a year ago.

The monthly DataQuick study records home sales that closed in September, reflecting agreements between sellers and home buyers over the previous 30 to 60 days. A median price, calculated by analyzing all completed transactions, shows the value gained or lost by the typical home during the month.

A similar report is expected to be released later this week for Ventura, Riverside and San Bernardino counties. Home sales in the Inland Empire generally have been outpacing those in Orange or Los Angeles counties, but a larger proportion of entry-level homes have kept prices from rising as rapidly there as in coastal counties.

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Orange County Home Sales

Sales of homes fell 6% in September after an up-and-down summer. But the big news last month was the median price for existing single-family homes hit the $300,000 mark. See story, A1. The chart shows sales, median prices and median prices per square foot by ZIP Code for new and existing single-family homes and condominiums.

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* CITY BY CITY

Latest O.C. home sale numbers and prices, by ZIP Code. B4