Housing market continues to gain equity
Local homeowners can again be glad they chose to settle in
Newport-Mesa. A new round of statistics showed home prices rose yet
again in most of the area.
The figures, which tracked August home and condo prices, were
released Monday by DataQuick Information Systems, a La Jolla-based
company that tracks real estate prices. Compared with August of last
year, the only neighborhoods where home prices dipped was in the ZIP
Code that includes Newport Heights and West Newport. The
year-over-year drop was a paltry 1%, bringing those neighborhoods
home prices to $880,000.
Compared to July 2005 prices, median prices in those neighborhoods
went down by about $120,000. The only other area where home prices
dropped from July to August was south Costa Mesa. There, the July to
August dip was only about $20,000, and the area recorded median
prices of $707,500.
In Balboa Island, the median home price was reported as being a
little more than $2 million. Year-over-year price comparisons for the
island were not given, and figures on the area were not released in
July.
In Newport-Mesa, August’s biggest price jump was in the ZIP Code
that includes Balboa Peninsula Point. DataQuick reported median home
prices in that area were $3.1 million, a hefty increase above July’s
median price of about $1.8 million.
In the six-month period between March and August, median home
prices in that area fluctuated in a range between $1 and $2.2
million. Typically, the volume of home sales in that area is small --
DataQuick reported five sales for August -- which makes it possible
for the sale of a very high-end property to push numbers skyward.
In the long run, Realtor Sally Martin said the trend of people
tearing down older properties and building more upscale homes in
their place is propping up prices in the area.
“We’re seeing prices we haven’t seen there before,” she said.
Over time, continued upward pressure on prices across Balboa
Peninsula could change the area’s image.
“As the prices go up, you’re going to find less and less young
people being able to live and party there,” Martin said. She said
rental rates on the peninsula tend to go up at the same time as home
prices.
Concerning the future, G. Christopher Davis of UC Irvine’s Paul
Merage School of Business said the home market could settle down in
the next few months. He said August is often strong, since its home
buyers’ last chance to buy a home with a 30-day escrow and move in
before their children have to start school.
To an extent, Davis believes the recent surge in home prices is
fueling itself, as buyers can take advantage of their homes’
appreciation to move into more upscale digs. He does not believe
Orange County’s home prices are floating on a bubble, though he is
concerned for home buyers who purchased their houses with an
adjustable-rate mortgage. If rates go up, those people could be in
for a rude awakening.
As of Sept. 8, mortgage giant Freddie Mac reported the average
rate for a 30-year, fixed-rate mortgage was 5.71%, plus a fee of 0.6
points. Rates for 15-year fixed mortgages averaged 5.3% and 5-year
hybrid adjustable-rate mortgage rates averaged 5.24%. Fees for those
mortgages were also 0.6 points. Average rates on 1-year
adjustable-rate mortgages were 4.45% with a 0.7 point fee.
“I counsel anyone who asks me, they ought to get out of their
adjustable-rate mortgage now if they’re going to live in their house
for more than three or four years,” Davis said.
* ANDREW EDWARDS covers business and the environment. He can be
reached at (714) 966-4624 or by e-mail at
o7andrew.edwards@latimes.comf7.