Orange County Home Prices Soar

The O.C. remains hot -- when it comes to houses.

Orange County home prices continued to climb at a torrid pace last month as the median price jumped 21.3% from a year ago to hit an all-time high of $467,000 during a month that saw a 5.8% increase in sales to 4,693. That is the biggest volume for any December since 5,064 homes sold in 1988, and analysts say the pace shows no signs of letting up.

“Indications are that sales counts are going to stay strong,” said John Karevoll, an analyst with DataQuick Information Systems, the real estate data provider that released the statistics Tuesday.

Part of the median -- the point at which half the homes cost less, half more -- price jump was fueled by 869 new homes that hit the market in December, a relatively high number, Karevoll said. New homes typically cost more than homes that are being resold. Still, he said, appreciation was up across all price categories, from condominiums to high-end luxury homes.

“It was just a darn strong end of the year,” Karevoll said. “That’s all there is to it.”

The median price of a new single-family house in Orange County was up 8% from a year ago to $594,000. Other increases were more extreme: The median price for a house that was resold was up 24.1% to $490,000, and resold condominiums climbed 25.3% to $324,500.

The rate of appreciation should ease back to the mid-teens by late spring, Karevoll said.

That, however, depends on what interest rates do, said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University, who called mortgage prices “the only key driver” of the market.

The job market has not been strong and household incomes are growing slowly, so what makes a potential buyer into a buyer is an interest rate he can afford, Adibi said. “Buyers are not really looking at home prices anymore, they are looking at monthly payments.”

Adibi predicted that interest rates would go up one percentage point in 2004 and slow the rate of price appreciation. Should rates hold steady or go down, however, home prices could climb even higher because demand from Southern California’s growing young population will remain strong.

Orange County’s home prices reflect much of the rest of the region in December. Last week, DataQuick reported that Los Angeles County home prices hit $345,000. That was a 23.7% jump from a year ago.

In San Diego County, DataQuick reported, the median home price in December rose 13.4% to $405,000. Preliminary figures for other Southern California counties showed an increase of 20.4% to $272,000 for a median-priced home in Riverside County, a 23.6% rise to $215,000 in San Bernardino County and a 19.3% increase to $415,000 in Ventura County.