Orange County’s housing market came roaring back in April, as home prices climbed to within 7 percent of the local record and sales hit the highest level in 21 months, according to CoreLogic’s monthly housing report, released Tuesday.
The median price of an Orange County home, or the price at the midpoint of all transactions, hit $600,000 for only the second time since the housing market crash.
That’s up 4.2 percent from a year ago amid a tight market that features low inventory and the highest buyer demand in two years.
The median home price in Orange County hit a record high of $645,000 in June 2007, according to CoreLogic. The last time the median reached $600,000 or higher was last June, following seven years of prices below the $600,000 mark.
The median price for resale houses hit $675,000 in April, a post-recession high, according to CoreLogic.
The report also showed that 3,497 homes changed hands in April, the biggest monthly sales tally since July 2013.
“It’s a terrific market, and if someone’s thinking of selling, it’s an excellent time,” said Julie Boynton, an agent with Seven Gables Real Estate in Tustin. “The fact that we’re in single-digit appreciation shows we’re moving in a good direction (for sellers), but it’s not going crazy. It’s not an insane market.”
The limited number of homes for sale remains a big factor, driving bidding wars, local agents said.
Steve Thomas of ReportsOnHousing.com calculated that it would take 56 days to sell all the homes on the market at April’s sales pace. Just 35 days are needed to sell all the listings in the $250,000-to-$500,000 price range, with 40 needed for homes listed from $500,000 to $750,000.
That compares with an average of four months in figures dating back to 2004.
As of May 7, Orange County had 5,825 homes for sale in the Realtor-run Multiple Listing Service – nearly 850 fewer than a year ago, Thomas reported.
Orange County is not unique. Tight inventory and rising demand also characterize housing across the state and the nation.
Home prices rose in 148 of 174 U.S. metro areas during the first quarter of the year, the National Association of Realtors reported last week. Statewide, home prices were up in 42 out of 49 counties included in the California Association of Realtors report for April.
California Realtors attributed rising sales to solid job growth and near-record low interest rates.
“While it’s a welcomed sign to see the growth in housing demand continue, the lack of supply remains a concern,” said Leslie Appleton-Young, chief economist for the group. “The imbalance between the two sides not only intensifies market competition and pushes home prices higher, but also leads to housing-affordability issues that could ultimately lower the home ownership rate.”
The median price of a Southern California home hit $429,000 in April, the highest in 71/2 years, CoreLogic figures show. The sales tally for the six-county region totaled 21,708 homes, up 8.5 percent and the highest since August 2013.
Rising demand also may be spurring an increase in homebuilding.
The U.S. Commerce Department reported Tuesday that single-family home construction starts in April hit the highest level in 71/2 years, surging to a seasonally adjusted annual rate of 1.14 million units.
Local agents say one-story homes are in big demand this year, but they were at a loss to explain why. Young first-time buyers were seeking them almost as fast as aging baby boomers looking to downsize, said Mary Morris of Re/Max Premier Realty in Mission Viejo.
Morris sold a single-story house last month, getting five offers within days of its coming on the market.
“We had an open house that Saturday and got multiple offers that day,” Morris said. The three-bedroom, upgraded house sold for $654,500 – $6,000 over the seller’s asking price.
To sweeten their bid, the buyers offered to let the sellers live in the home an extra 30 days for free.
“That’s becoming more common,” Morris said. Buyers also rarely make offers contingent on selling their older homes first because of the competitive disadvantage of doing so.
“Properties still are going off the market within the first couple weeks,” Morris said.
CoreLogic Analyst Andrew LePage noted also that many buyers still face credit and affordability hurdles.
Morris said South County buyers “are holding back,” wary of price creep.
“Not every property has multiple offers,” Morris said. Today’s buyers “really know their price per square foot, and they know when a home is overpriced.”
Boynton said she sold a three-bedroom house in Tustin Ranch last month, going into escrow five days after listing it even though she never put a for-sale sign out. The house sold for $615,000.
“Inventory is still pretty scarce in between $500,000 and $700,000. Nice properties in that price range are sought after, and most likely receive more than one offer,” she said. “If it’s priced well, you may not get above (the asking price), but you’ll get close to your price.”
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