Orange County home prices in June hit a record high for a second straight month, with bidding wars and historically low interest rates fueling demand for a still-limited number of affordable homes for sale.
The median price of an Orange County home – or the price at the midpoint of all sales – was $657,500, real estate data firm CoreLogic reported Tuesday. That’s up $29,000, or 4.6 percent, in a year and $6,000 in a month.
Prices here have been rising steadily for four straight years, CoreLogic figures show.
Meanwhile, sales dipped in June, but ever so slightly, CoreLogic reported. A total of 3,786 Orange County houses, condos and townhomes changed hands last month, a decrease of 64 homes, or 1.7 percent, from the June 2015 sales total.
CoreLogic analyst Andrew LePage speculated that high home prices, and a decreased number of buyers who can afford them, could be reasons for the slight decline.
But last month’s sales tally is still the second-highest for a June in the past decade.
In addition, the market has yet to get back to prerecession levels when taking inflation into account.
The previous peak of $645,000, reached in June 2007, is equivalent to $750,000 in today’s dollars – or $92,000 higher than June’s median.
In addition, the median prices for existing condos and houses, which make up 89 percent of the market, still lag records set in 2006 and 2007, even without adjusting for inflation.
Home prices were up across Southern California as well, although sales dips also occurred in Los Angeles and San Diego counties, CoreLogic figures show.
The median price of a Southern California home was $464,000, up 5 percent in a year. That’s just 8 percent below the all-time high of $505,000 in the spring and summer of 2007.
In all, 24,326 homes changed hands in the region last month, or 51 fewer than the same month last year.
“Prices in today’s market and during the last housing boom were fueled in part by job growth, consumer confidence and tight supply,” LePage said. “The current cycle has received a boost from historically low mortgage rates – about 3.6 percent recently compared with the 6 percent range” at the last housing peak.
Agents said June’s closed sales numbers reflect market activity in May, when those deals were signed. Things have been slightly slower since July 4, with homes taking slightly longer to sell – especially in neighborhoods where prices start at $1 million or more.
“It’s steady,” said Keller Williams agent Christine McGowan-Lopour of Los Alamitos, president of the Anaheim-based Pacific West Association of Realtors. But, she added, “it’s not the crazy growth.”
The number of listings also increased slightly, with 7,329 homes for sale as of Thursday, according to Steve Thomas of ReportsOnHousing.com. That’s 6 percent more than at the same time last year.
But June was busy for Gantry Wilson, a Keller Williams agent in Huntington Beach. Wilson had 19 escrows open at one point last month, nine of which closed in June.
“June was my biggest month ever,” he said.
And demand is as hot as ever for what passes as the affordable sector of the Orange County market – homes in the $500,000 to $800,000 range, according to Wayne Woodyard, president of the Orange County Association of Realtors, and Thomas.
Woodyard, manager for Berkshire Hathaway HomeServices offices in Monarch Beach and San Clemente, said one client seeking to buy a home for $500,000 threw in the towel Monday night after getting outbid on three houses.
On Tuesday morning, the client called back to say he had changed his mind. He wanted to bid $50,000 over a home’s asking price just to get it over with.
“There’s a lot of frustration in the market,” Woodyard said.
Some relief could be coming soon.
A bill on President Barack Obama’s desk will increase the supply of condos on the market by increasing the availability of Federal Housing Administration mortgages for such purchases, Woodyard noted.
The measure lowers the minimum number of owner-occupied units a condo complex must have to qualify for FHA financing.
“That’s going to open up some inventory for us,” Woodyard said.
Wilson advised buyers who are frustrated by today’s prices to lower their sights and gain a foothold in the market, either by downsizing or choosing a more affordable neighborhood.
Rising prices and increased equity could give house hunters a shot at buying a better home down the road.
“It may not be your dream home,” Wilson said, “but it’s a stepping stone.”
Original article published on OC Register written by Jeff Collins