According to the California Association of Realtors, CA home sales registered healthy gains in the first quarter of 2018 after January’s weak start.
California Market Update
February’s sales figure was up 3.3% from January and up 5.4% compared with home sales in February 2017. The year-to-year increase was the largest since March 2017, and the month-to-month increase was the largest since June 2017.
“February’s solid market performance was likely fueled by rising interest rates, which motivated buyers to rush in and close escrow before rates move even higher as they’re anticipated to do in the coming months.” said C.A.R. President Steve White.
“Home prices across the state continued to grow in general.” said C.A.R. Senior Vice President and Chief Economist Leslie-Appleton-Young. “What’s more, with single-family home prices rising rapidly out of reach, buyers increasingly turned to condominiums, which pushed the median price of condominiums to a new record high.”
Condo/townhome prices have been growing at a robust pace. The statewide condo/townhome median price has been growing faster than that of the existing single-family homes with a 13.3% year-over-year increase, as compared to 8.8% for existing single-family homes. At $461,400, the statewide condo/townhome median price set a new peak price, exceeding the previous high of $451,450 registered in June 2017.
Orange County
The increase in condo/townhome pricing is definitely a trend we are seeing in Orange County as well. It has for example become increasingly difficult to find a 3 bedroom condo in Irvine below $650,000, whereas this was still possible a couple of years ago. This trend can also be seen in other communities such as Laguna Niguel and Aliso Viejo, where buying a 3 bedroom home at an entry level price is becoming increasingly difficult. If this trend continues, it will be particularly important for buyers who require 3 bedrooms and who have been on the fence to make a move before interest rates increase again.
Furthermore, January through March 2018 saw a 6.9% average sales price of homes below $1 million (which includes mostly condos and town homes) increase as compared to the same period last year, while sales remained relatively stable.
On the other hand, homes over $1 million, saw a small price reduction in the first quarter of -2.1%. At the same time, sales in this category were up 13.5% which may push the prices back up if this trend continues.
Mortgage Rates
Mortgage rates have been on the rise since breaking the 4.0 percent barrier in January. The 30-year, fixed-mortgage interest rates averaged 4.33 percent in February, up from 4.03 percent in January and from 4.17 percent in February 2017, according to Freddie Mac.
The average 30-year fixed mortgage rate is currently about 4.55%, up from 4.54% last week. 15-year fixed mortgage rates increased to 4.01% from 3.98% this week.
About Jaleesa Peluso, Laguna Beach Realtor & Certified International Property Specialist
Jaleesa specializes in representing local as well as foreign buyers and sellers of Orange County real estate. Are you considering leasing, buying or selling your Orange County home? Call us now at (949)395-0960!