Competition among buyers for a drastically reduced number of homes continued to drive up Orange County prices last month, making it tougher for first-time buyers to jump into the market.
Yet there still was enough demand to drive home sales to the highest level for a September in three years, according to figures released Friday from housing tracker DataQuick Information Systems.
High demand and record low inventory drove up Orange County home prices and sales for a fifth consecutive month, housing tracker DataQuick Information Systems reported Friday. The price at the midpoint of all Orange County home sales held steady at $450,000 in September, up 5.9 percent from a year ago.
KEVIN SULLIVAN, THE ORANGE COUNTY REGISTER
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"We have a painful lack of homes available for sale," said Scott P. Brady, president of the Anaheim-based Pacific West Association of Realtors. He noted that non-distressed "equity" sales now make up the bulk of home sales.
The result: higher prices, higher sales and the lowest inventory since at least 2004. Specifically, DataQuick reported:
?The median price of an Orange County home sold last month was $450,000, up 5.9 percent from September 2011. The median home price has been at or above $450,000 just four other times since prices plummeted by 43 percent in 2008.
?County officials recorded 2,677 homes changing hands last month, up 6.7 percent from year-ago levels. September was the eighth consecutive month of year-over-year sales gains, although last month's annual increase was the second-smallest since the streak began.
September also marked the fifth consecutive month that Orange County saw both home prices and sales on the upswing.
But before people starts popping Champagne corks, consider two sobering facts:
Last month's sales tally still was 27 percent below the September average. And the median home price remains at December 2003 levels, which is 30 percent below Orange County's record price of $645,000, set in 2007.
Record low inventory
Housing insiders said the biggest trend in the market now is the lack of homes for sale.
Steve Thomas of ReportsOnHousing.com reported Friday that homes for sale dropped 60 percent in the past year, falling to 4,191 homes on the market.
"The inventory shed another 5 percent in just two weeks, 10 percent in the past month," Thomas said.
The reason? Foreclosures have all but vanished.
Foreclosures fell by 43.6 percent last month to 338 homes, DataQuick reported. Foreclosed houses ? which once made up almost half of all Orange County house sales ? made up just a tenth of such sales last month.
And even fewer foreclosures likely are in the coming year.
DataQuick reported that default filings fell 48.5 percent last month to 865. It was the first month in five years to see default notices -- recorded after a homeowner is at least 90 days late on mortgage payments ? fall below 1,000 filings.
The result is a greater portion of pricier homes selling at the high end, coupled with hefty price hikes at the low- and mid-ranges of the market.
"No doubt, the tight inventory is driving prices higher," said Phil Schaefer, a Santa Ana agent and former Pacific West Realtor president. "I'm not sure I remember a time with so little inventory."
For example, million-dollar ZIP codes had 139 home sales in September -- up 16 percent vs. a year ago. And sales were up 44 percent in the county's priciest third of ZIP codes, by far the biggest gains in the county.
"There's been a major change in market mix, meaning fewer low-priced sales, fewer foreclosures re-selling, and more sales in middle and upscale markets," said DataQuick President John Walsh.
Indeed, average prices for the most-expensive ZIP codes in the county fell last month by about 0.7 of a percent, DataQuick figures show. Still, home values were up by 4 percent to 5 percent in the county's middle- and bottom-range ZIP codes.
Sellers Market
Gilda Johnson, an agent for Seven Gables Real Estate in Anaheim Hills, sold a house on Orchid Lane last month for $5,000 above the asking price just four days after it went on the market, with several shoppers bidding on it, she said.
The house sold for $80,000 more than a nearly identical home nearby earlier this year.
"We have such a limited inventory and such great (interest) rates, people are saying, 'OK, I'll pay another $30,000,' " Johnson said. "This is an election year, and the economy is the same and gas prices are rising. Yet (home) prices are going up."
Entry-level shoppers are frustrated because much of the buying at the low end is by investors, who pay cash then rent out the homes.
DataQuick reported that likely investors made up 27.3 percent of Southern California homebuyers, while buyers paying all cash accounted for 31.5 percent of the region's transactions.
With home prices rising, buyers face another problem: Loan appraisals often are too low, killing some deals outright. Agents say that appraisals ? based on past sales ? have yet to catch up with the market.
"The only factor keeping a lid on prices is the inability of appraisers to justify this trend," said Pacific West President Brady.
-- Register Business Columnist Jonathan Lansner contributed to this report.
Contact the writer: 714-796-7734 or jcollins@ocregister.com
Source: http://www.ocregister.com/articles/percent-374443-sales-month.html
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