Orange County home sales tumble 34% as payments soar 49% in June

Orange County homebuying cooled by 34% in June as house hunters were scared off by 49% higher house payments.

Across Southern California, 20,289 single-family, condominium, existing and newly constructed homes — sold in six counties, down 1% for the month, and down 25% over the past year, says a DQNews report. The region’s median price of $750,000 was down 1% for the month, and up 11% over 12 months.

Pricier home loans meant SoCal’s typical buyer got a house payment of $3,311 a month for the $750,000 median vs. $2,290 a year ago on the $679,000 median. That’s a 44% jump in the theoretical monthly check to the lender.

My trusty spreadsheet found similar signs of a swiftly slowing market in the DQNews numbers on closed transactions in Orange County in June …

Sales swings

The tally: 2,767 Orange County residences sold. This was the fourth-slowest June of the 35 since 1988.

One-month change: 6% decrease from May. Since 1988, sales have fallen in this 30-day period only 26% of the time with an average 5.7% increase from May.

12-month change: 34% decrease — 14th biggest decline since 1988 (or it’s been worse only 3% of the time.)

Pre-pandemic: June sales were 17.4% below the 3,350 average buying pace of the month, 2010-2019.

Price patterns

The month: The countywide $1.025 million median for all homes was down 2.8% in a month while increasing 14% over 12 months. Record O.C. high? $1.054 million set in May.

One-month trend: Since 1988, a typical June had prices dip 74% of the time but averaged a 1.1% gain.

One-year trend: Smallest increase in 8 months. Latest gain tops 79% of all 12-month periods since 1988.

Downpayment: $205,000 at 20%, up $25,000 in a year.

Pandemic era? 17 price records have been broken since February 2020. The median’s $276,500 increase equals a gain of $13.49 every hour over these 28 months.

Key slices

Existing single-family houses: 1,731 sold, down 36% in a year. Median of $1.19 million was up 17% over 12 months.

Existing condos: 824 sales, down 31% over 12 months. Median of $726,750 was up 16% in a year.

Newly built: Builders sold 212 new homes, down 21% in a year. Median of $1.46 million was up 44% over 12 months.

Builder share: 7.7% of sales vs. 6.4% a year earlier.

Bigger picture

Rates: How pricey has money become? Rates on a 30-year, fixed-rate mortgage averaged 5.24% in the three months ending in June vs. 3% a year earlier. That translates to 24% less buying power for house hunters. (Larger drops occurred only 1% of the time since 1971.)

Payment pain: Changing rates meant a buyer paid $4,525 a month for the June median priced-residence vs. paying $3,036 monthly on a year earlier’s $900,000 median. So prices rose 14% vs. a house payment’s 49%

Downpayment: 20% down was $205,000 last month, up $25,000 in a year.

What sellers are thinking: Owners had 20% more homes for sale in Los Angeles and Orange counties inventory in June than 12 months earlier — No. 27 of 50 big metros, says Realtor.com. Inland Empire supply rose 72% — No. 5 of the 50.

Price cuts: 15.1% of L.A.-O.C. listings had price reductions — No. 18 in the nation, Realtor.com says. Meanwhile, 19.8% of I.E. listings had price cuts, — No. 7 of the metros.

Affordability: Ponder how much house you get for $1 million, according to Zillow. Los Angeles County buyers get 1,684 square feet — 33% smaller than the U.S. average of 2,528. Orange County is 1,687 square feet (33% smaller), San Bernardino County is 2,582 square feet (2% larger), and Riverside County is 3,032 square feet (20% larger).

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Source: Orange County Register