Orange County’s housing market heated up in June with both prices and sales soaring to highs not seen since the housing bubble burst eight years ago,CoreLogic reported Wednesday.
The Irvine-based data firm reported 3,831 houses and condos changed hands in June, the most for any month since June 2006.
In addition, the median price of an Orange County home – or price at the midpoint of all sales – hit $629,500 last month. That’s just 2.4 percent below the record price of $645,000 reached in June 2007.
Agents and economists attributed the residential rebound to the same factors behind rising rents and commercial real estate’s strong recovery: Rising employment levels and growing economic confidence.
A tight supply of homes for sale and low mortgage interest rates also boosted buyer demand.
“People are feeling more positive,” said Kevin Miller, a broker-associate with Berkshire Hathaway Home Services in Mission Viejo who closed six home sales in June.
Renewed homebuying and rising prices are occurring throughout the region.
Southern California home sales jumped 18.1 percent year over year to 24,378 transactions,CoreLogic reported. That’s a nine-year high.
The median Southern California home price was $442,000, up 5.7 percent from June 2014 levels, and coming within 13 percent of an all-time high of $505,000 reached in 2007.
Sales and prices were up in all six Southern California counties, with sales up as much as 20.8 percent in San Diego County and prices climbing at a 12 percent clip in San Bernardino County.
“Continued job growth, low mortgage rates, more confident consumers ... have put more wind in the housing market’s sails,” CoreLogic analyst Andrew LePage said.
Average rates for 30-year, fixed mortgages unexpectedly dipped below 4 percent early in the year, and dipped as low as 3.7 percent in April and May, when many of the deals closed in June were being negotiated.
Many buyers jumped at the chance to lock in those lower rates, fearing rates would rise later this year and increase their monthly house payments, several agents said.
“The single greatest motivator for people to buy real estate is fear of loss,” said Coldwell Banker agent Mac Mackenzie.
Housing economist G.U. Krueger doubts, however, that mortgage rates will rise dramatically in the year ahead.
He argued that strong economic fundamentals – such as growth in good-paying jobs and improved gross domestic product figures – are the foundation for last month’s market strength.
He noted, for example, that June’s home-price appreciation rate of 4.9 percent in Orange County is a sign the region is “basically back to normal, back to a more traditional housing market.”
“I think we’ve had in the last two years a pretty good economy in Southern California,” Krueger said.
Construction, wholesale, manufacturing, technology, education and government all “have relatively good job growth and high wages,” he said. “So the fundamentals are there.”
Still, it was tougher for buyers to find the right home to buy. The inventory of homes for sale averaged 11 percent below 2014 levels, nearly 800 homes, from April through early June.
CoreLogic figures show existing home sales powered June’s strong housing numbers. Existing house median prices hit $680,000 last month and the existing condo median hit $421,250, the highest since August 2007.
Sales of existing houses and condos were up 18.7 percent in Orange County last month. June, however, was the eighth straight month of declining new home sales, with homebuildertransactions down 5.1 percent year over year.
Prices were up in 63 of 83 Orange County ZIP codes, the biggest gains occurring in Newport Coast. Sales were up in 58 ZIP codes.
Stanton saw the biggest sales gain among Orange County cities, CoreLogic figures show. The city’s home sales were up 62 percent to 34 transactions, most likely because it is one of Orange County’s most affordable. Its median price of $344,500 was the county’s fourth lowest.
The hot-selling new home community of Baker Ranch propelled Lake Forest to No. 2 in sales gains. Transactions in that city were up 57 percent to 116 deals in June.
The biggest sales and price gains occurred in the priciest third of Orange County’s housing market. The median price jumped 21.8 percent in the top-tier market to an average of $1.2 million. Sales were up 23 percent to 1,357 transactions.
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