O.C. Housing Market Ended ’98 on Up Note

Orange County’s housing market capped its strongest year in a decade with a flourish last month, as home prices equaled their highest peak ever and December sales hit their highest level in the ‘90s.

The median price, meaning half the homes sold for more and half sold for less, climbed to $236,000, equaling its all-time high, Acxiom/DataQuick Information Services, a real estate research firm, reported Wednesday. The figure is 9.8% higher than a year ago, and up $7,000 from November.

For the year, the median home price surged 13%, to $226,000, setting an all-time high for an annual figure. The run-up was the most rapid increase in Southern California, said John Karevoll, the Acxiom/DataQuick analyst who compiled the report.

Many experts believe the price surge will continue in 1999.

The county’s tight labor market will boost incomes and keep housing demand high, said Mark Zandi, an economist with Regional Financial Associates in Pennsylvania. Prices also will continue to escalate because new-home construction will be unable to meet demand, he said.

If stocks stay strong and interest rates remain low, “we could see another double-digit gain in Orange County’s housing prices,” Zandi said.

The median price could climb as high as $265,000 this year, Karevoll predicted, adding that it’s a “certainty” that every home in the county will surpass its previous peak value of a decade ago.

A total of 4,330 homes and condominiums were sold during December, the highest sales of any December since 1988. Sales were up 4% from a year ago, marking the 33rd time in 36 months that sales have increased year-over-year.

“It didn’t slow down over the holidays,” said Patrick Knapp, an agent at ReMax Real Estate Services in Newport Beach. He said he received an average of 20 inquiries a day during the holidays, compared to two or three a day in previous years, as low interest rates apparently prompted buyers to act before prices move even higher.

Indeed, 1998 will be remembered as the year when Orange County’s housing market completely bounced back from its prolonged slump earlier in the decade. Homes grew in value, by some measures during the year, at the fastest rate in the nation. New homes jumped 28% to a median price of $313,000, their highest level ever.

And twice this year, the median price jumped $10,000 in a month, ending the year $17,000 above the previous record in 1991.

Sales for the year hit 50,027, a 20% gain over 1997, and were the most since 1989. The hectic pace mirrored a national trend. An estimated 4.8 million units sold nationwide last year, according to the National Assn. of Realtors, the most since the organization began tracking the trend in 1968.

“It’s been a banner year,” said Orawin Velz, the group’s managing director.

In the fall, just more than half of Orange County’s priciest homes accounted for an enormous $20 billion in equity gains, more than enough to recover all of the equity losses of the early 1990s.

Some economists are skeptical that the county’s home prices will continue skyward.

James Doti, the president of Chapman University who has compiled a countywide forecast for the past 20 years, predicts that growth will slow to a walk from a sprint this year, mostly as a result of continuing economic turmoil in Asia, Orange County’s largest trading partner.

He expects that home prices will rise only about 5% this year.

Still, many homeowners saw appreciation levels much greater than that in 1998.

Denise and Jim Barber put their three-bedroom, 2 1/2-bath condominium in Rancho Santa Margarita on the market in September. After eight years, they wanted a detached home with a larger backyard.

While they waited for consumer confidence to rebound from the stock market crash, their home sat on the market nearly three months. But it sold for 21% more than they paid for it, or roughly $40,000.

“A year ago, we wouldn’t have been able to move because we would’ve taken a loss,” said Denise Barber, an office supervisor at American Imports Inc., wholesale-importer of balloons in Irvine. “But we came out so far ahead that everything worked out fine. I’m happy with it.”

Low interest rates have helped homeowners trade up into larger homes. For instance, a median-priced home, assuming a 20% down payment and a 30-year fixed mortgage at current rates, works out to roughly $1,175 per month. A decade ago, when interest rates hit double-digit levels, the median priced came with a monthly payment of more than $1,600.

Still, economists noted, affordability will become a increasingly important issue in the new year. In November, 38% of Orange County’s households earned enough money to buy the median-priced home. That compares to 42% statewide, and 55% nationwide, according to the California Realtors Assn.

The same group noted that resale homes are now spending an average of 28.6 days on the market, the lowest level in at least a decade.

Some Realtors noted that buyers, especially first-timers, already are feeling the effects. “They’re looking for a value buy,” said Pat Neal, a Huntington Beach broker.

She has seen a surge of buyers in the new year as more consumers feel secure in their jobs and as rents continue to rise.

“We hope the [interest] rates stay down, and incomes go up because it will be a problem for Orange County if we get into an affordability crunch again,” Neal said.

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Orange County Home Sales

Home sales in Orange County for 1998 totaled 50,027. That was the highest annual tally since 1988, when 57,182 homes were sold. The 1998 median price of $226,000 was the highest ever, and the median price per square foot, $142.07, the highest since 1991. For full-year sales and prices by zip code, see www.timesoc.com/HOME/NEWS/ORANGE/BUSINESS/

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Sales Median price Median price/square foot 1988 57,182 $183,000 $121.00 1989 51,232 $212,000 $148.02 1990 41,930 $214,000 $147.81 1991 31,741 $218,000 $143.75 1992 28,389 $212,000 $140.34 1993 31,830 $202,000 $130.90 1994 36,284 $202,000 $126.38 1995 30,748 $193,000 $122.55 1996 36,494 $192,000 $121.42 1997 41,739 $200,000 $126.55 1998 50,027 $226,000 $142.07

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Source: Acxiom/DataQuick

Orange County Home Sales

Orange County home sales jumped 4.4% to 4,330 in December, the highest for that month since 1988, when 4,949 homes were sold. The median price jumped to $236,000, up 9.8% from a year ago. Sales, median prices and price per square foot of new and resale homes and condominiums by ZIP Code shown below. For full-year sales and prices by ZIP Code, see https://www.timesoc.com/HOME/NEWS/ORANGE/BUSINESS

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Percent Median Percent ’97 Med. Community, ZIP Sales change price change sq. ft. Aliso Viejo 92656 154 5.5% $207,182 4.5% $125 Anaheim 92801 39 18.2% $158,000 6.4% $111 Anaheim 92802 17 -39.3% $155,000 -3.1% $105 Anaheim 92804 59 -7.8% $169,000 11.3% $110 Anaheim 92805 49 22.5% $165,000 14.2% $114 Anaheim 92806 35 29.6% $202,000 8.6% $101 Anaheim 92807 70 25.0% $259,750 23.7% $114 Anaheim 92808 58 -12.1% $309,250 14.3% $128 Brea 92821 47 2.2% $240,000 21.1% $120 Buena Park 90620 78 20.0% $203,000 23.0% $122 Buena Park 90621 50 85.2% $261,750 103.4% $100 Corona del Mar 92625 19 -57.8% $615,000 2.5% $309 Costa Mesa 92626 46 9.5% $235,000 11.5% $144 Costa Mesa 92627 52 15.6% $210,000 -3.2% $153 Cypress 90630 65 14.0% $220,000 10.0% $124 Dana Point 92624 12 -7.7% $215,000 -12.6% $176 Dana Point 92629 50 -23.1% $334,000 26.0% $165 Foothill Ranch 92610 26 -48.0% $263,500 23.4% $115 Fountain Valley 92708 69 9.5% $251,000 12.8% $123 Fullerton 92831 53 60.6% $205,000 -4.0% $124 Fullerton 92832 23 21.1% $166,000 7.1% $133 Fullerton 92833 45 -16.7% $189,500 19.6% $125 Fullerton 92835 28 -15.2% $307,000 5.3% $141 Garden Grove 92840 64 33.3% $170,250 10.2% $121 Garden Grove 92841 29 61.1% $170,000 -0.1% $116 Garden Grove 92843 38 -17.4% $165,000 18.7% $126 Garden Grove 92844 26 44.4% $139,500 8.8% $105 Garden Grove 92845 27 22.7% $222,000 15.0% $136 Huntington Beach 92646 68 -12.8% $248,000 9.6% $149 Huntington Beach 92647 60 22.4% $226,500 -3.4% $157 Huntington Beach 92648 86 -28.9% $391,500 -2.4% $161 Huntington Beach 92649 46 -9.8% $225,000 0.7% $182 Irvine 92604 50 35.1% $267,000 18.7% $142 Irvine 92606 48 -30.4% $250,250 3.0% $128 Irvine 92612 47 38.2% $248,500 -6.2% $173 Irvine 92614 29 -14.7% $245,000 0.9% $160 Irvine 92620 79 1.3% $304,000 8.8% $130 La Habra 90631 61 -6.2% $167,750 2.3% $115 La Palma 90623 22 57.1% $268,500 20.1% $114 Laguna Beach 92651 45 -8.2% $500,000 26.3% $275 Laguna Hills 92653 121 10.0% $164,000 3.3% $130 Laguna Niguel 92677 148 -20.0% $260,000 -2.1% $151 Lake Forest 92630 112 17.9% $192,500 1.3% $119 Los Alamitos 90720 25 -3.8% $359,000 21.3% $178 Mission Viejo 92691 93 9.4% $230,000 11.4% $129 Mission Viejo 92692 108 -14.3% $287,000 22.9% $127 Newport Beach 92657 24 33.3% $486,500 -14.9% $291 Newport Beach 92660 76 5.6% $568,500 4.3% $235 Newport Beach 92661 3 -57.1% $907,500 -8.1% n/a Newport Beach 92663 41 28.1% $290,000 20.1% $307 Orange 92865 18 5.9% $232,500 10.7% $125 Orange 92866 18 63.6% $197,250 6.0% $155 Orange 92867 64 42.2% $271,500 -0.4% $125 Orange 92868 17 54.5% $161,000 11.8% $112 Orange 92869 94 67.9% $272,000 21.0% $126 Placentia 92870 70 9.4% $215,750 4.2% $114 R. Santa Margarita 92688 214 -10.5% $249,000 32.4% $122 S. Juan Capistrano 92675 91 18.2% $308,500 -16.8% $114 San Clemente 92672 59 15.7% $290,000 31.2% $160 San Clemente 92673 53 76.7% $364,000 27.5% $156 Santa Ana 92701 36 12.5% $128,000 53.7% $119 Santa Ana 92703 49 36.1% $150,000 11.9% $114 Santa Ana 92704 72 30.9% $158,000 10.5% $116 Santa Ana* 92705 56 19.1% $304,500 3.6% $163 Santa Ana 92706 41 36.7% $179,000 10.5% $126 Santa Ana 92707 53 6.0% $143,000 20.2% $123 Seal Beach 90740 12 -29.4% $369,500 17.3% $157 Stanton 90680 38 35.7% $134,000 25.2% $119 Trabuco/Coto 92679 103 -39.4% $431,500 32.8% $124 Tustin 92780 43 -29.5% $202,500 23.1% $103 Tustin 92782 93 86.0% $270,250 6.4% $128 Villa Park 92861 9 -10.0% $483,500 15.1% $156 Westminster 92683 101 -3.8% $190,000 5.3% $121 Yorba Linda 92886 67 13.6% $257,500 11.0% $133 Yorba Linda 92887 32 14.3% $349,500 15.6% $146 Other 107 - - - - Countywide 4,330 4.4% $236,000 9.8% $128

‘98 Med.* Community, ZIP sq. ft. Aliso Viejo 92656 142 Anaheim 92801 127 Anaheim 92802 125 Anaheim 92804 137 Anaheim 92805 125 Anaheim 92806 123 Anaheim 92807 138 Anaheim 92808 149 Brea 92821 136 Buena Park 90620 140 Buena Park 90621 113 Corona del Mar 92625 314 Costa Mesa 92626 157 Costa Mesa 92627 178 Cypress 90630 145 Dana Point 92624 207 Dana Point 92629 197 Foothill Ranch 92610 136 Fountain Valley 92708 145 Fullerton 92831 141 Fullerton 92832 126 Fullerton 92833 142 Fullerton 92835 147 Garden Grove 92840 131 Garden Grove 92841 132 Garden Grove 92843 131 Garden Grove 92844 118 Garden Grove 92845 163 Huntington Beach 92646 178 Huntington Beach 92647 170 Huntington Beach 92648 180 Huntington Beach 92649 189 Irvine 92604 173 Irvine 92606 137 Irvine 92612 160 Irvine 92614 169 Irvine 92620 162 La Habra 90631 133 La Palma 90623 133 Laguna Beach 92651 329 Laguna Hills 92653 153 Laguna Niguel 92677 172 Lake Forest 92630 143 Los Alamitos 90720 207 Mission Viejo 92691 156 Mission Viejo 92692 150 Newport Beach 92657 n/a Newport Beach 92660 258 Newport Beach 92661 407 Newport Beach 92663 229 Orange 92865 141 Orange 92866 153 Orange 92867 139 Orange 92868 133 Orange 92869 147 Placentia 92870 135 R. Santa Margarita 92688 146 S. Juan Capistrano 92675 152 San Clemente 92672 191 San Clemente 92673 167 Santa Ana 92701 120 Santa Ana 92703 135 Santa Ana 92704 131 Santa Ana* 92705 146 Santa Ana 92706 131 Santa Ana 92707 138 Seal Beach 90740 205 Stanton 90680 115 Trabuco/Coto 92679 153 Tustin 92780 126 Tustin 92782 158 Villa Park 92861 189 Westminster 92683 140 Yorba Linda 92886 164 Yorba Linda 92887 161 Other - Countywide 148

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Median resale price per square foot

* Includes Lemon / Cowan Heights

Sales, Price Trends

Monthly Sales

Dec. 1997: 4,147

Dec. 1998: 4,330

Median Price

Dec. 1997: $215,000

Dec. 1998: $236,000

December Sales

Dec. 1994: 3,075

Dec. 1998: 4,330

December Median Price

Dec. 1994: $205,000

Dec. 1998: $236,000

Source: Acxiom / DataQuick Information Systems; Researched by JANICE JONES DODDS / Los Angeles Times