Is a record home price on the way for Orange County?

We’re darn close to a new record median home price for Orange County.

CoreLogic reported that for the 22 business days ending Oct. 21, Orange County’s median selling price for all residences was $661,000 – up 9.3 percent compared with a year ago. If that mid-October price holds for the entire month, the market would top its current full-month peak of $655,000 set in June.

Mid-month homebuying trends can be volatile, but it’s worth noting what seems to be a rare, year-end price surge that’s quickly pushing the market into record territory. It’s also worth noting it took nine years to beat the previous high of $645,000 set in June 2007.

This soaring median of early fall doesn’t appear to be scaring off too many buyers, as 3,365 Orange County residences were bought in the period, up 7.7 percent from a year ago. Sales rose in 47 of 83 Orange County ZIPs compared with the year-ago period.

The higher median, however, may be more the result of a changing mix of what’s selling – more pricey homes – than signifying any substantial increase in values of individual homes.

Sales of the bargain hunter’s favorite target, resale condos, were down in the most recent period: 896, off 4 percent from a year ago. Median condo price was $450,000, up 4.8 percent from a year ago.

Meanwhile, new homes – a pricey niche of the market – are hot. Builder sales were 428, up 48 percent from a year ago. Median selling price was $937,000 – up 6.8 percent from a year ago.

As a result of these two trends, new homes were 12.7 percent of the current market vs. 9.3 percent a year ago. Condos’ 26.6 percent share was down from 29.9 percent.

Many real estate pros blame a limited supply of more “affordable” homes for weak sales at the market’s lower end. ReportsOnHousing shows 1,061 homes listed for sale priced under $500,000 as of Thursday, down 23 percent in a year. Supply of all higher-priced homes is up 2 percent.

Another way to look at the split market is this way:

Closed sales in the 27 least-expensive ZIPs though Oct. 21 – median at $580,000 and below – rose 1 percent vs. a year ago, while sales in the 27 priciest ZIPs – median beginning at $705,000 – rose 16 percent. By the way, in the 11 Orange County ZIP codes with a median above $1 million, sales totaled 346 homes, up 21 percent compared with a year ago.

You have to wonder: The low-end sluggishness may now be more of an affordability problem for house hunters of modest means. Owners of cheaper homes may not be selling because they are unable to afford a move-up home.

And that’s before factoring in the recent jump in mortgage rates after the presidential election. What does that do to the homebuying equation?

Curiously, a record high price raises as many questions as it answers.

Contact the writer: jlansner@ocregister.com

CoreLogic reported that for the 22 business days ending Oct. 21, Orange County’s median selling price for all residences was $661,000 – up 9.3 percent compared with a year ago.

The higher median, however, may be more the result of a changing mix of what’s selling – more pricey homes – than signifying any substantial increase in values of individual homes.

Sales of the bargain hunter’s favorite target, resale condos, were off 4 percent from a year ago.  Meanwhile, new homes – a pricey niche of the market – are hot. Builder sales up 48 percent from a year ago.

Many real estate pros blame a limited supply of more “affordable” homes for weak sales at the market’s lower end.   Sale priced under $500,000 are down 23 percent in a year. Supply of all higher-priced homes is up 2 percent.

The low-end sluggishness may now be more of an affordability problem for house hunters of modest means as well as a move-up problem for current owners.

What does that do to the homebuying equation?  Curiously, a record high price raises as many questions as it answers.

By JONATHAN LANSNER / Staff Columnist, Orange County Register 11/21/2016