Prices of New Southland Homes Rise in 1st Quarter

Prices of new homes rose sharply across the Southland during the first quarter, reflecting consumers’ willingness to buy property even though costs are rising significantly.

Median prices ranged from $239,990, or 8.6% higher from a year ago, in Riverside County, to $437,990, a 30.7% increase, in Ventura County, according to the quarterly report released Tuesday by Meyers Group, a real estate research firm in Irvine.

Consumers demonstrated growing confidence in the economy by purchasing larger and and more expensive homes, said Jeff Meyers, the group’s president. Builders were able to raise prices because the number of interested buyers far outpaced the amount of new units available.

“You have strong demand,” Meyers said, “and not much variety in the marketplace right now. It’s exceptionally tight.”

Median prices--meaning half cost less and half cost more--for new single-family homes, townhomes and condominiums rose during the quarter in San Diego to $385,990 or 18.8%; in Orange County to $470,990 or 18.3%; in Los Angeles County to $327,990 or 11.6%; and in San Bernardino County to $247,900 or 10.2%.

The supply of new housing, which hovers near record lows, will expand slightly as more properties are completed this year.

Meyers said greater availability will lead to a double-digit increase in sales, especially if price hikes slow down.

Home builders may have less room to raise prices because of already steep increases. And home buying may be dampened if mortgage rates edge higher as many analysts expect.

Consumers could see prices rise at a slower pace for the rest of the year. Meyers projects an annual rate of growth of about 5%. “Prices will continue to go up,” he said, “but not as quickly as the first quarter.”