Reports from San Diego-based DataQuick and the National Association of Home Builders indicate that home prices in Orange County have been dropping, even as investors snap up lower-priced properties. Home sales are also up in Orange County and across the region, pointing to a desirable buyer’s market with growing activity.
The Building Industry Association reports that home affordability also increased across Southern California, according to the group’s Housing Opportunity Index (HOI), which takes into account area home prices and regional median income. Still, Building Industry Association of Southern California CEO David Shepard points out that local government fees and red tape can add several thousand dollars to new home prices, contributing to the region’s position among the most expensive in the country for homebuyers.
“In this market, every dollar counts, and the competition with foreclosed homes and short sales remains fierce,” Shepard said. “We look forward to partnering with state and local governments to reduce fees, speed up processing times and craft other measures to make more projects 'pencil.' That will create jobs, generate tax dollars and allow more families to buy today’s exciting new homes.”
Despite the improving trends, However, Orange County still ranks as the sixth most expensive metro area for homebuyers in the nation.
The BIA’s HOI determines the relative affordability of home real estate on the market in a given metro region for a family earning the median income for that area. Orange County, with a median home price of $384,000, brought in an HOI score of 50.7 for the first quarter of 2012, meaning that 50.7 percent of the homes for sale in Orange County are affordable for a family earning the median income for O.C. That figure is increasing from last year, when it pulled a 47.4 (Q4 2011) and 44.8 (Q1 2011). At its lowest point, the first quarter of 2006, Orange County earned an HOI score of 2.5; the area was the second most expensive metro area in the country for homebuyers.
The Building Industry Association of Southern California region comprises Los Angeles, Orange, Imperial, Riverside/San Bernardino (as a single statistical area) and Ventura counties. Of the five areas, Imperial County came out as the most affordable, with a median home price of $121,000, amounting to an 83.7 HOI rating.
Across the Southland, lending was on the rise in April, although it has yet to reach recovery levels, according to DataQuick.
Mortgages larger than the conformation limit of $417,000 –– also known as jumbo loans –– funded almost 19 percent of the purchase lending dished out during the month, while adjustable-rate mortgages accounted for only 7 percent of the market. Jumbo mortgage financing is at its highest point for the region since December 2007.
“The housing market continued its painfully slow crawl back toward normalcy last month. You can see it in the fading role of foreclosures, the uptick in median prices here and there, and the higher levels of sales in coastal counties,” said DataQuick president John Walsh, describing the market as slowly recovering, but still “abnormal,” pointing to the high rate of investor and cash purchasing and much-reduced lending activity.
DataQuick reports that across the Southern California region –– which includes Los Angeles, Orange, Riverside, San Bernardino and San Diego counties –– home prices fell in only Los Angeles and O.C., although Ventura’s slight increase of less than 1 percent might be considered a flat change. The report details year-over-year changes, comparing April 2012 to April 2011. The number of homes sold increased in four out of the six regions; Riverside and San Bernardino experienced declines.
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