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Median price of O.C. Real Estate hits a new high in August - $617,000
By Jeff Collins-O.C. Register
The Orange County Register Limited choices for home shoppers – plus continued cheap mortgages and a strong job market – helped drive local home prices in August to a seventh record peak in nine months. The median sales price of an Orange County home was $617,000 as of August 2005, DataQuick Information Systems reported. The median is the point at which half the homes sold for less and half sold for more August's median is up from $601,000 in July and a 13.6 percent jump from the same month last year, when fears were mounting that the local housing market was in trouble. Sales were brisk in August as 4,708 units were sold. That's a 25 percent jump in pace from August 2004 amid that year's summertime doldrums. While home prices have tripled in the past eight years, many believed that this rally was at an end last summer. Homeowners flooded the market with listings, apparently seeking to cash in. The number of homes listed for sale ballooned to 13,300 in August '04 vs. last month's 7,200. "Last August, honestly, my clients were panicking," said housing consultant John Burns of Irvine, who provides market data to homebuilders. "Now things couldn't be better. Prices are appreciating slowly, which is what we want to see."Prices for the typical O.C. house or condo are up on average $74,000 in the past year - $132,000 in the past 15 months."The question becomes, why are people buying if it's less affordable?" asked Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University. The answer, he said, is a combination of low mortgage rates, creative financing, plenty of jobs and tight housing supplies. One popular mortgage – a loan that's fixed for five years before payments adjust – has enjoyed starting rates under 5 percent for three years now. But most significant to Adibi is psychology."People obviously believe that home prices are going up, (and) they don't want to be left out," he said. High prices may be keeping some people in place. Adibi and others said that many homeowners are remodeling rather than paying high prices for a move-up house. In addition, other owners aren't selling because of the increased property taxes they'd face if they gave up Proposition 13 tax breaks by moving. This trend contributed to a 46 percent decline in property listings. "We have surging demand," said Cas Pinkowski, president-elect of the Orange County Association of Realtors. "(It's) Economics 101: Our supply is down and demand is up, and so prices keep going up."Deanna Mazurek, an agent at RE/MAX Real Estate Services in Laguna Niguel, sees growing demand for moderate-priced condos. And each condo sells for about $10,000 to $15,000 more than the last one, he added. "About that housing bubble: It's not happening here," Deanna said. "Things are still selling... Things are good."Real estate consultant Mark Baud forecast that home prices will continue going up in the next year – but appreciation will fall to about 6 percent a year. At that rate, the median price in August 2006 will be about $650,000. Prudential California executive Bob Chapman, president of the Newport Beach Association of Realtors, agrees that increases will moderate. "I'm still confident it's an active, healthy market," he said. "(But) buyers are a little more cautious. They don't want to pay (for future) appreciation."
posted by Shawn Pagano @ 3:39 PM
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