The median cost of a new home in Orange County surged to an all-time high of $909,000 in February, according to CoreLogic/Dataquick. That’s a 16.4 percent increase from a year earlier and it surpasses the previous record of $864,000 reached during the height of the last housing bubble.
The reasons homebuilders are able to command such high prices today are numerous, but in its report the Orange County Register cited the skyrocketing price of land in Orange County and increased demand from “move-up” owners and foreign buyers as the main reasons. Also, increasing numbers of Chinese buyers and other affluent immigrants are driving up costs, the Register reports.
While new home prices soared by double-digit percentage points, the overall Orange County housing market saw a more mild 4.2 percent increase in the median home price to $590,750. That remains 8 percent off the peak level.
As prices continued their upward trajectory, the number of home sales in Orange County fell in February. However, many observers noted sales really began ramping up in February and the next report should reflect that trend.
In February, total home sales fell 1.5 percent from a year earlier to 2,074. For new homes, the fall was even more dramatic. New home sales were down 13.9 percent from a year earlier, which is the fourth straight month sales have fallen on a year-over-year basis. However, as the Register notes, that follows a long run of increases that last November reached an eight-year high.
The numbers for February are about what was expected, but what’s really going to be interesting is next month’s report. Anecdotal evidence suggests home-buying activity in Orange County has really ramped up since after the Super Bowl, as the economy has gained strength and people are wanting to take advantage of still-low interest rates.