O.C. home prices and sales level off, but median price of new homes hits all-time record of $937,500
O.C. home prices and sales level off, but median price of new homes hits all-time record of 7,500
Orange County home sales and prices “lost steam” in October, dipping more than usual from September amid the elevated cost and restricted supply of homes, property data firm CoreLogic reported Wednesday.
But one sector of Orange County housing hit a surprising milestone last month: New home prices reached an all-time high not far below $ 1 million, even as sales of new homes slumped for the 12th consecutive month.
The median price of all Orange County homes – the price at the midpoint of all sales – slipped to $ 600,000 in October, down 2.4 percent on the month. It was the second-biggest September-to-October percentage drop in numbers dating back to 1988.
Although the median price was up on an annual basis – rising $ 6,500, or 1.1 percent, from October 2014 – it was still the smallest year-over-year percentage gain since March.
Sales volume last month likewise lacked oomph.
CoreLogic reported that 2,858 new and existing homes closed escrow in October, down 10.5 percent from September and 0.7 percent from October 2014.
It was the first year-over-year sales drop since January and was the smallest number of closings for an October since the market recovery began in 2012.
Industry insiders wondered, however, if there are too few homes for sale rather than too few buyers.
Orange County had 6,132 homes listed for sale in the Realtor-run multiple listing service as of Nov. 5, down 11 percent from a year earlier, according to ReportsOnHousing.com. The market has shed more than 1,000 homes since peaking at nearly 7,200 listings in late August.
“Is there an inventory issue or a sales issue?” asked Terry LeClair, senior vice president for sales at Irvine-based First Team Real Estate. “There’s less to choose from.”
CoreLogic analyst Andrew LePage said weak sales may be attributable to two factors: Price and supply.
“Sales remained constrained by a tight inventory of homes for sale and lower affordability,” he said.
Steve Thomas, author of ReportsOnHousing.com, noted that the inventory shortage is worse for more affordable homes, while demand for high-end homes was dampened by the stock market shakeup in August and September, when deals that closed in October would have been signed.
“The luxury market got hit in September because of the stock market dip,” Thomas said. “For example, demand in Newport Coast dropped down to 5 pending sales (as of) … Sept. 24, and there were 121 homes on the market at the time.”
An analysis of CoreLogic data confirms the decrease in high-end sales. For example:
• Transactions at $ 700,000 and above fell from 39.7 percent of all deals in September to 37.5 percent in October.
• In Orange County’s 27 priciest ZIP codes – median sales price beginning at $ 700,000 – sales were down 7.6 percent from a year ago.
• In the seven Orange County ZIP codes with median selling prices above $ 1 million, sales were off too: 155 homes sold, down 9.4 percent from a year ago.
“The big drop in new home sales and the overall temporary hit in the upper end had an impact on the drop in median,” Thomas said. “Real prices on the street did not drop.”
The market’s lackluster price performance in October did not affect new homes, which surged to a record median of $ 937,500. That tops the previous record of $ 899,000 reached in February and amounts to a huge jump from the year-to-date 2015 average of $ 849,000.
Experts were at a loss to explain the price surge, which occurred even as sales decreased 29 percent to 244 homes – below the monthly sales average of 276 for the first ten months of 2015.
It’s possible that the jump in new home prices was due to a change in the mix of sales – either because more luxury units were sold or because there were fewer sales of affordable homes.
The market’s autumn chill also is being felt elsewhere in the region, although not as badly as in Orange County.
“After a relatively strong summer, Southern California home sales lost steam in October, dipping more than usual from September and rising only slightly from a year earlier,” LePage said in Wednesday’s report.
In all, 19,930 homes changed hands in the region’s six-county area last month, up 1.3 percent from October 2014 levels.
In addition to Orange County, Los Angeles County also posted a year-over-year sales drop. Sales were up in Riverside, San Bernardino, San Diego and Ventura counties.
The median price of a Southern California home was $ 435,000 in October, unchanged from September, but up 5.6 percent year over year.
In addition to Orange County, Los Angeles and San Diego counties also saw the number of new home sales slump last month.
So where are new home sales rising?
In moderately priced Riverside, San Bernardino and Ventura counties, which all had double-digit year-over-year gains in new home sales in October.
Register staff columnist Jonathan Lansner contributed to this report.
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