From the OC Register on
A late-summer surge in home buying pushed Orange County housing prices to record highs, shattering the $700,000 price barrier.
The median price of a home — or the price at the midpoint of all transactions — hit $710,000 last month, up 10.9 percent year over year, housing tracker CoreLogic reported Tuesday.
That’s up $25,000 from August’s median of $685,000, the sixth-biggest one-month price gain in records dating back to 1988.
Last month’s median almost elevates Orange County home values to Bay Area levels, where the nine-county median was $742,000 in August.
Home prices also rose in September throughout Southern California, pushing the regionwide median to its bubble-era high of $505,000 for the first time in a decade, CoreLogic reported.
Los Angeles County’s median hit an all-time high of $575,000 for a third straight month.
And despite a severe lack of homes to buy, Orange County’s sales pace was strong, rising 4.6 percent. It was the busiest September since 2005.
Orange County’s price hike is due to a combination of factors, including some statistical hocus-pocus: An increase in pricier new-home sales and a decrease in lower-cost condominiums pushed the overall median upward.
But hocus-pocus only goes so far. Home prices are, indeed, rising.
The median price per square foot for a resale house — a better apples-to-apples comparison — hit $404, an 11-year high.
Additionally, two separate home-price indexes — CoreLogic’s and the California Association of Realtors price report — showed record highs in a single market sector: Orange County’s resale house price.
“What it comes down to in simple language is supply and demand,” said Randy Rector, CEO of Irvine-based HomeSmart Evergreen Realty. “You’ve got an inventory shortage, and you still have buyers who want to buy homes. And the interest rates have stayed somewhat flat.”
How big an inventory shortage?
Orange County has 1,122 fewer homes for sale this month than at this time last year when the number of listings already was well below average, reported Steven Thomas of ReportsOnHousing.com.
And listings for low-cost starter homes — priced at $500,000 and below — are down 38 percent from last year.
“We’re dealing with such a limited inventory, we should see (price) appreciation,” Thomas said. “There really is nothing available, especially below $750,000.”
First Team agent Madeleine Semaan said she recently sold a 1,400-square-foot condo for $620,000, or $446 per square foot.
“On a condo,” she said.
Some buyers sign up with listing agents to improve their chances of getting the winning bid when there are multiple offers for a home.
Tuan Nguyen and Jeannette Vu contacted an agent directly who had the listing for a four-bedroom, 2½-bathroom house in Anaheim Hills. That proved to be the winning ticket for the Anaheim couple and their French bulldog, Scout.
“We thought if we worked with the sellers’ agent, we’d have a better chance to get the house,” said Nguyen, a registered nurse. “He turned out to be a really good guy. We’re really glad we did that.”
Nguyen and Vu had been house hunting for 1½ years, looking at more than 50 houses from Huntington Beach to Rancho Mission Viejo, from Tustin to Irvine.
But the homes either needed too much work, were outside of their price range, or they got outbid by other buyers. Another problem: He’d like a home, but she wouldn’t, or vice versa.
“It got to the point where we actually stopped looking for a while. We gave up,” Nguyen said.
Then Nguyen got a Trulia alert this past summer about a house on Bauer Road listed for $730,000. He called the agent, visited it and fell in love.
“Both my wife and I loved it,” Nguyen said. “Everyone in my family loved the house. So here we are.”
They paid $722,500.
CoreLogic figures show Nguyen and Vu were among 3,338 Orange County home buyers last month.
Builders had a bigger chunk of last month’s market, with new home sales accounting for 15 percent of last month’s transactions, vs. an average of 12 percent during the preceding year.
Several developers expanded their offerings just as resale listings fell to a four-year low, said economist Mark Boud, president and founder of San Clemente-based Real Estate Economics.
“Supply is so tight for the existing home market, when new homes become available, they sell,” Boud said.
Believe it or not, parts of Orange County are more affordable than such Los Angeles County areas as the South Bay and the West Side.
Engineer Pedram Khosh Bakht of Redondo Beach and his wife, Mina Nasij, quit their jobs in Hawthorne and found new ones in Orange County — just so they could find a house they can afford in Yorba Linda, Brea or Anaheim Hills.
Finding new jobs was a snap. Both got positions at the same company. Finding a home: Not so easy.
“People were bidding on each other, and the prices kept going up and up,” said Khosh Bakht, 38, who had been house hunting since January. “It was very, very hard to find anything close to what we wanted, and the ones we found, there already were too many offers on it.”
In August, the couple finally found the perfect house, which just had posted a price reduction.
They paid $710,000.
“I believe we were one of those lucky ones,” Khosh Bakht said. “We were able to find a house toward the end of the season.”