Fueled by low borrowing rates and stiff competition among buyers, Orange County’s home prices hit a record high last month, real estate data firm CoreLogic reported Tuesday.
May’s median price, or price at the midpoint of all sales, was $651,500.
That’s up by $6,500 from the June 2007 peak of $645,000.
Orange County is the first housing market in the region to see prices regain lost value after a $281,500 climb from the market bottom in January 2009.
Nonetheless, experts say May’s record doesn’t mean the market is entirely back where it was at the height of the housing boom.
“It’s totally meaningless,” economist Chris Thornberg of Beacon Economics said of May’s price record. “First of all, it’s not inflation-adjusted. And if you look at it from an affordability standpoint, homes are far more affordable now than they were in 2007.”
Once inflation is taken into account, May’s median was almost $96,000 below the June 2007 high.
And because of historically low mortgage rates, today’s typical house payment is $347 a month lower than the typical payment in June 2007, CoreLogic figures show.
In addition, a shift in the mix of homes sold last month to pricier new homes likely had more to do with May’s price gain than increasing home values. For example, sales for new homes, which had a median of $821,250, were up 49 percent. Sales for lower-priced existing homes increased just 2.3 percent.
Existing homes also failed to beat their pre-recession peaks. The median price of an existing house was $710,000 in May, well below the June 2007 record of $734,000. The median condo price was $435,000 vs. the March 2006 record of $470,000.
Lastly, a separate market barometer, the CoreLogic Home Price Index (HPI), shows Orange County home values are still 6.7 percent below the previous peak.
“It’s a healthy market. It’s certainly not an ’05, ’06 market,” Mac MacKenzie, a Coldwell Banker agent in Irvine, said of current housing conditions.
Home sales likewise were on the rise last month, with 3,612 houses, condos and townhomes changing hands, a 6.2 percent year-over-year gain. It was the fifth-busiest month for sellers in the past decade.
“Everyone knows there’s such a shortage of (for-sale) inventory, anything that’s priced right is getting multiple offers,” said Bram Klein, an agent with Keller Williams Realty, which opened an office last week in Laguna Niguel. “The frustration for buyers, with so many buyers competing, prices are always going up.”
That was the complaint that Tustin renter Pratik Zaveri had while looking in April at open houses in Irvine.
“The longer you wait, it looks like the more you pay for a smaller house,” Zaveri said.
Thuy Vu, 38, of Anaheim has been shopping for two years for a house to buy with her mother and sister. The median home price has gone up by $56,000 since they started looking.
“It’s hard to buy,” said Vu, a waitress who has looked at 20 to 30 homes, during an open house in Garden Grove.
“It’s a difficult market for first-time buyers,” said Huntington Beach broker Mary Jane Cambria. “It’s not the first day that they’re hitting the realization that they’ve been priced out of the market. That’s been coming for several years now.”
Elsewhere in the region, home prices and sales continued to rise in May.
The median price for six Southern California counties was $459,500 in May, CoreLogic reported. Home sales rose 3.3 percent to 22,466 transactions.
Prices rose in all six counties included in the report, while sales rose everywhere but Ventura County.
The Southern California median still was 9 percent below the region’s peak price of $505,000 reached during the spring and summer of 2007.
Meanwhile, Steve Thomas of ReportsOnHousing.com said signs of a market cool-down has cropped up in recent weeks, after the period covered by CoreLogic’s May Report.
“Those May numbers reflect what was going on in April when we saw a high in demand,” Thomas said.
Since then, the inventory of Orange County listings increased by at least 170 homes from the year before. At the same time, homes going into escrow slipped to 2,989, down from 3,144 a month earlier.
“When you have more supply and less demand, things start to cool off,” Thomas said.
Market observers had mixed views about whether Orange County home prices will continue rising.
Cambria, the Huntington Beach broker, predicted price gains will continue going up by about 5 percent a year.
“I don’t see (prices) dropping, I don’t see them accelerating. It’s a healthy appreciation rate,” she said.
But Thomas and Irvine agent MacKenzie see prices either leveling off or dropping as the summer doldrums set in.
“It is a seller’s market,” Thomas said, “but it is weakening and evolving into a slight seller’s market where appreciation slows,” he said.
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