$630,000: Orange County Median Home Price in December is Highest Since Great Recession

By the numbers alone, Orange County’s housing market just had an incredible month, with the highest prices since the Great Recession and the busiest December in a decade.

But then again, new housing numbers out Tuesday don’t tell the whole story.

A surge in pricier new home sales helped account for the bump in pricing. And new loan-disclosure rules that delayed the closing of home sales in November resulted in a big jump in December transactions.

Still, local market watchers said, rising employment and continued low mortgage rates also had a hand in boosting the market in December.

Irvine-based home-data firm CoreLogic reported the median price of an Orange County home – or the price at the midpoint of all sales – was $630,000 in December. That’s up 8.2 percent from December 2014, the highest annual home-price gain in more than a year.

That’s also the highest median price for any month since the housing bubble burst eight years ago, and just 2.3 percent below the all-time high of $645,000 reached in June 2007.

In addition, 3,206 houses, condos and townhomes – new and existing – changed hands last month, up 13.8 percent, CoreLogic figures show. That’s the highest tally for any month since July and the most for a December since 2005.

December sales typically rise from November as builders and others rush to get housing transactions completed before year’s end. But last month’s sales jumped 31 percent from November, twice the average November-December increase.

Industry insiders across the state are blaming new loan-disclosure rules known as “TRID,” saying December stole some of the sales that normally would have closed in November because of delays those rules caused.

“I don’t think (the entire sales jump) would have happened without TRID,” CoreLogic analyst Andrew LePage said. “(Sales) would have increased. It just wouldn’t have been as big an increase.”

In addition, an unusually big year-end rush to get new home sales recorded also skewed the overall median price upward.

CoreLogic reported that Orange County builders closed 517 sales last month, up 24 percent from December 2014. By comparison, existing home sales, which sell for less, increased just 12 percent last month.

“It’s a change in the mix,” said housing economist G.U. Krueger. “The new housing market is gaining market share, which is pushing up the overall median home price.”

Pete Reeb, a principal with Irvine-based John Burns Real Estate Consulting, said new home sales are up because there is more building and more publicly traded builders who are under the gun to to bolster their 2015 balance sheets. Orange County had 111 projects at the end of the third quarter, up from about 100 at the start of the year, he said.

The median new-home price increased 2.1 percent year-over-year last month to $875,000, CoreLogic reported. But prices for existing homes were up even more. The median price for an existing house was up 4.9 percent to $670,000; the median for an existing condo increased 7.7 percent to $420,000.

Rising house prices are pushing a growing number of buyers into the townhome and condo market.

“Most people have champagne taste and a Coca-Cola budget,” said Ron Denhaan of Realty One Group in Mission Viejo, explaining that demand is highest for three-bedroom, detached houses. “But you have a big cross-section of people who can’t afford to buy that. So they’re looking at townhomes and condos for $500,000 or less.”

Because of high house prices, added Steve Thomas of ReportsOnHousing.com, “the lower end of the market ... is the next segment to ignite.”

Home prices and sales also soared throughout the rest of Southern California, CoreLogic reported. The region’s median home price was up 6.7 percent year-over-year to $443,000, the highest since October 2007. Regional home sales increased 9.8 percent to 20,890 transactions, the most for any December since 2009.

The Southern California median was Price and sales gains were recorded as well in all six Southern Californian counties, although Orange County recorded the biggest percentage gains in both categories.

Elsewhere, prices were up from 3.4 percent in Ventura County to 8.1 percent in Los Angeles County. Sales rose from 7.9 percent in Ventura County to 11.4 percent in San Bernardino County.