Bubble Watch: Orange County home sales at post-recession low
Buzz: It’s the slowest start to a year for Orange County’s housing market since the Great Recession.
Trend reported: CoreLogic shows 6,211 Orange County residences sold in the first quarter, 20.4% below the start of 2018. Sales rose in only 13 of 83 Orange County ZIP codes compared with the year-ago period. The first quarter saw the fewest home sales since 2009’s first three months. It was also the third-slowest first quarter for sales in CoreLogic’s database dating back to 1988.
Yes, only other two years — mid-crash 2008 and 2009 — have been worse in at least 32 years.
So it should come as no surprise that Orange County’s median sales price for all residences was down 2.1% in a year to $710,000. Prices rose in only 36 of 83 Orange County ZIP codes.
No slice of the market escaped buyers’ reluctance …
Single-family home resales: 3,784 sold — down 17.2% from a year ago. The median was $760,000, down 1.9% from a year ago.
Resales of condos: 1,721 sold — down 18.4% from a year ago. Median was $485,000, down 3%
Builder sales: 706 new homes sold — down 37.3% from a year ago. Median was $1.02 million, up 15.8%. Builders’ share of sales: 11.4% vs. 18.1% a year earlier.
The chill hit the market’s more “affordable” niches …
27 least expensive ZIP codes: Median at $624,000 and below — 1,728 homes sold vs. 2,046 a year ago. That’s a 16% drop.
Relative bargains: Seven ZIPs with median prices of $500,000 compared with seven a year earlier. Sales in the sub-half-million ZIPs totaled 367 vs. 362 a year earlier — up 1% in a year.
And the upper crust, too!
27 priciest ZIPs: Median of $779,000 and higher — 2,048 homes sold vs. 2,586 a year ago. That’s off 21%.
Seven-figure ZIPs: 10 Orange County ZIP codes had medians above $1 million. Sales totaled 629 homes, down 22% in a year. There were 11 seven-figure ZIPs a year ago.
16 beach-close ZIPs: 1,233 homes sold — down 26%.
On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … 3.5 BUBBLES! This wintry slowdown looks worrisome despite other signs of a solid economy.
Think about this: It’s the slowest late winter for homebuying since the last bubble burst. And it comes on the heels of decent job creation and lenders that are still lending, albeit at somewhat higher rates. We hear things have warmed up this spring … but until significant improvement is made, be wary!
Was the chilly winter for housing just a “blip” of a warning signal?