Home Sales Rally in Parts of County

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RISMEDIA, May 22, 2008-(MCT)-Home sales rebounded in Orange County last month, with 20 out of 83 ZIP codes selling more houses and condos than in April of last year.

While that is still a slim slice, just two ZIP codes had sales gains on a year-over-year basis in March.

DataQuick Information Systems, which released its latest report Monday, says shoppers completed more home deals in April than in any month since August, the peak of a credit crunch in the Orange County housing market.

Sales totaled 2,166 in April, the first time they were above 2,000 homes a month since the market-thrashing liquidity crisis — caused by investors shunning mortgage securities sold on Wall Street, thus drying up home-loan funding.

On the flip side, the median price of an Orange County home fell 20.5 percent, to $500,000, the lowest price since March 2004. April’s median was down 22 percent, below June 2007’s peak of $642,500.

Prices were down 12 percent for existing single-family houses, nearly 29 percent for existing condos, DataQuick figures show. Prices for new homes — both houses and condos — were down 37 percent.

“I don’t believe (rising sales are) the sign of a market recovery,” said real estate consultant Pat Veling of Real Data Strategies Inc. in Brea. “We still are in a severe crisis of confidence. While we’re starting to see some greater stability in the market, I don’t think we’re in any sort of a long-term level toward an upward trend yet.”

Last month’s buying activity was 19 percent below a year ago and 46 percent below the average April since 1988. It also was the slowest April in DataQuick’s 21-year sales history. Overall home buying in April had its 31st consecutive month when sales failed to beat the year-ago level.

Sales for the January-through-April period were down 57 percent compared with the 20-year average.

But this spring’s sales surge could continue into summer.

Market watcher Steve Thomas at RE/MAX Real Estate Services in Aliso Viejo says homes are selling faster.

Every two weeks he calculates “market time,” a benchmark of how many months it theoretically takes to sell all the inventory in the local multiple listing service at the current pace of pending deals being made.

By his calculations, it would take 5.82 months for buyers to gobble up all homes listed for sale Thursday, the best figure in 14 months.

Two weeks ago, the inventory-to-sales ratio was 6.08 months, and it was 8.0 months a year ago. The latest number of deals in escrow was 2,658, up 166 percent from the wintertime low Jan. 19.

“It is a matter of time before the data that the media is supplied catches up to the story of today: Demand is much stronger than last year,” Thomas said.

The sales surge was driven mainly by house hunters looking for bargains at the low end of the price spectrum, figures from both Thomas and DataQuick show.

The number of houses that sold for $500,000 or less increased 55 percent last month, DataQuick reported. The number selling below $400,000 doubled.

At the same time, there were 47 percent fewer houses selling last month above $600,000, down from 1,341 in April 2007.

Veling said sales traditionally pick up this time of year. But another reason for last month’s sales upticks is pent-up demand.

“We have been at far too low a level of sales for too long,” he said.

Sales were up even more in the Inland Empire, where low prices and foreclosure sales make up a bigger proportion of the market, according to DataQuick.

“We continue to look for evidence of a sales bounce in the mid-priced and higher-end markets along the coast,” said DataQuick President Marshall Prentice. “If the higher conforming loan limits are making a difference in those areas, it’s certainly not a large one, at least not as of the end of April.”

Still, some parts of the county — particularly those with high foreclosures and falling prices — are seeing a small sales bounce. Nearly three out of every 10 homes sold in Orange County last month had been in foreclosure during the prior year, DataQuick reported.

Copyright © 2008, The Orange County Register, Calif.
Distributed by McClatchy-Tribune Information Services.

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