By JONATHAN LANSNER, OC Register
Housing sales may be improving, but recent news hints that it may not be smooth sailing.
One reason your real estate pals might be smiling these days: Buyers spent a total of nearly $1.4 billion in March on broker-listed Orange County homes, the highest volume amount in eight months.
New figures from the Southern California Multiple Listing Service show broker-controlled sales up 22.6 percent in the first quarter of the year, driven by higher sales and increased home prices. Highlights of the report:
• Orange County home sales generated $3.4 billion in total revenue during the first three months of the year, up $618 million, or 22.6 percent from the first quarter of 2009.
•In March, revenue was up 26.5 percent from the previous March. Last month’s sales generated the most revenue since July.
•First-quarter home sales were up 6.2 percent to 6,022 homes. In March alone, sales were up 10.3 percent to 2,468 homes sold.
•The average home price in the first quarter was $556,450, up, 15.4 percent from the first quarter of 2009.
•The average price for a detached house was $717,171, up 20 percent; the average price for a condo and other attached home was $329,096, up 9.8 percent.
•In March, the average home price was $563,476, up 14.7 percent.
•Although first quarter revenues were up from the past two years, they still were down 41.5 percent from the first quarter of 2005, when revenue had peaked at more than $5.7 billion.
Not to be a spoilsport, but, we did note this cautionary analysis in the latest Orange County home inventory report from Steve Thomas at Altera Real Estate. He writes: “Agents in the trenches are stating that there are more overpriced, unrealistic sellers placing their homes on the market. Prior to the start of the year I forecasted that the discretionary seller would return; however, if more and more homes are placed on the market at unrealistic values, the inventory will continue to rise. This rise in inventory could dampen demand. This is a trend that we will have to continue to watch”
And the economists at mortgage insurer PMI Group, while noting that Orange County is no longer among the riskiest U.S. home markets — barely, did paint a worrisome picture in it analysis of the final quarter of 2009 …
•Local home prices have a 99.8 percent chance of price declines in the coming two years. That is down from 99.9 percent in the third quarter (tops in the U.S.)
•This time, Orange County — by a whisker — missed joining the “riskiest” clan of seven cities at 99.9 percent.
•Orange County’s market is still jittery, as PMI found home-price volatility of 29.9 percentage points over five years vs. an average of 19 points for the top 50 U.S. markets.,
•Blame the price tumble. In a year, the fortunes of Orange County’s housing prices swung negative 23.38 percentage points in a year vs. a negative 6.78 average among the Top 50.
•Orange County’s affordability index ran 2 percent above its 1995 benchmark level vs. 2 percent below in Q3 and vs. 31.7 percent above for the Top 50.
•Unemployment in Orange County ran 5.3 percentage points higher than its five-year trends at year’s end vs. 4.6 points above for the top 50 average.
PMI concludes this about the nation’s largest markets: “Although the Risk Index does not measure the magnitude of future declines, the forecast does provide encouraging signs for moderating probabilities of price declines for the remainder of 2010 and into 2011 among these largest MSAs.”
We are still puzzled about the true direction of the beach-town housing markets. Ponder these two sets of stats:
•The latest Orange County home inventory report from Thomas at Altera says that as of April 29, the “hardest” market to sell a home in, based on inventory of homes for sale vs. new escrows opened, is Newport Beach. It’s got a “market time” at 8.9 months to theoretically sell all for-sale homes at the current buying pace. Laguna Beach, Corona del Mar and Seal Beach were also in the Top 5 “hardest” to sell markets.
•However, DataQuick says in the month ended in mid-April, 455 homes sold in Orange County beach cities’ 17 ZIP codes. That is a jump of 39 percent from a year ago — seemingly a sign homes are moving. Median selling price? $773,000 in these 17 ZIPs. And the median of the beach ZIPs price change was a gain of 12.8 percent vs. a year ago.
The Lansner on Real Estate blog’s most-popular postings in April:
1. A $10 million castle in …. Corona?
2. This Irvine home again tops most-viewed list
3. Selling Orange County mansion? Wait 3 years!
4. Tustin base project called worthless
5. $129,850 income needed to buy Orange County home