Summer Bright for Home Prices; Record Matched

Capping a strong summer, Orange County’s housing prices resumed their upward trek last month, matching the all-time median record of $241,000, as buyers shrugged off higher interest rates to snap up homes.

After a slight dip in July, prices moved up in all housing categories, from condominiums to new homes, with the typical home selling for $3,000 more last month than in July and $11,000 more than in August 1998, a real estate research firm reported Monday.

Indeed, only heavy activity in condominiums, which generally have the lowest prices, prevented the county’s median price from breaking into record territory last month, said John Karevoll, an analyst with Acxiom/Dataquick Real Estate Systems Inc., which prepared the monthly report.

If condos were factored out, the typical home in Orange County would have been worth $251,000, Karevoll estimated.

It was the 27th consecutive month that housing prices have surpassed year-earlier numbers, and Karevoll predicted that prices will continue to move up.

He noted that home prices per square foot moved up 11% last month to a record $160.31. The indicator, considered a truer measure of how prices are moving, has registered double-digit gains in six months this year.

Sales slowed a bit from the hectic pace of a year ago, but August still was one of the busiest months of the decade, as buyers purchased 4,612 homes. The heavy activity came despite interest rates that crept above 8% last month for the first time in more than two years, according to HSH Associates, a New Jersey-based financial publisher.

Although overall housing sales fell 2.1% below sales a year ago, sales of existing condos moved up 2.6%, a sign that “entry-level buyers are getting a home they’ve thought about buying awhile,” Karevoll said.

Resale condos also registered the strongest price gains during the month, moving to $162,500, up 9.8%, or more than $14,000, from a year ago, the survey found.

Other housing analysts sounded a more cautious note about the market’s performance, however.

While pockets of “exceptional activity” exist throughout Orange County, the market has “slowed substantially,” said Patrick Veling, an analyst at Dynamic Marketing Resources Inc. of Fullerton.

Single-family homes sit on the market an average of 57 days, up from 42 days earlier this year when the market was at its tightest. Condos remain on the market an average of 52 days, up from 47, he said.

“Those sellers testing the waters to see if buyers will overpay for homes are finding their places on the market longer than they would be,” Veling said.

The hottest areas in Orange County, he said, include Cypress and Dove Canyon, where homes pending for sale have received offers slightly above the list price. In Seal Beach, sellers are receiving 99% of the list price.

But in other communities, hefty price gains have disappeared, partly because higher prices have increased monthly mortgage costs, he noted.

Buyers who put 20% down on a median-priced home with a fixed 30-year mortgage bearing a 7.75% interest rate are facing a monthly payment of $1,727, about $130 more than the mortgage for the typical home a year ago, Veling said.

Agents also said that while the market remains strong, they have seen signs of slowing in recent weeks. Homes have taken longer to sell, they said, as buyers have been trying to get top value for their dollar.

“I’m still seeing a good clip of sales, but there’s been a slowdown,” said Dave Macleod, an agent at Century 21 Beachside in Huntington Beach.

More new homes in South County have been placed on the market in planned communities, such as Northpark, Talega and Ladera Ranch.

But homeowners seeking to move up “seem to be shocked that when they put their home on the market they may have to lower the price more than what they thought,” said Patrick Knapp, an agent at Remax Real Estate Services in Newport Beach.

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Sales, Price Trends

Monthly Sales

*--*

December 1998 $236,000 July 1999 238,000 May 1999 241,000 June 1999 241,000 August 1999 241,000

*--*

Median Price

*--*

1998 Sales Median price Aug. 4,710 $230,000 Sept. 4,331 $227,000 Oct. 3,913 $230,000 Nov. 3,578 $229,000 Dec. 4,330 $236,000 Jan. 2,804 $231,000 Feb. 3,002 $226,000 Mar. 4,446 $232,000 April 4,658 $232,000 May 4,275 $241,000 June 5,129 $241,000 July 4,828 $238,000 Aug. 4,612 $241,000

*--*

August Median Price

*--*

Median Price 1994 $208,000 1995 190,000 1996 196,000 1997 203,000 1998 230,000 1999 241,000

*--*

Condo median price trend

1998

Aug.: $148,000

Sept.: 148,500

Oct.: 151,500

Nov.: 150,000

Dec.: 154,000

1999

Jan.: 158,500

Feb.: 150,000

Mar.: 157,500

April: 160,000

May: 163,000

June: 160,000

July: 158,750

Aug.: 162,500

Source: Acxiom/Dataquick

Researched by JANICE JONES DODDS/Los Angeles Times