OC home market shows continued strength

(Staff/AP)

For the sixth straight month Orange County home prices and sales volume have increased over the previous year’s,  data released Tuesday shows.

Buyers have recognized that home values are at bargain levels not seen in decades, experts say, and they are snatching up more homes. Meanwhile, prices are rising as fewer distressed properties hit the market.

The February OC median home price is $417,000, up 11.2 percent from the February 2009 median of $375,000, according to the San Diego research firm MDA DataQuick. The volume of sales increased in the county by 5.7 percent — from 1,879 homes in February 2009 to 1,986 homes sold last month.

“More and more buyers are recognizing this is a once-in-a-lifetime opportunity to purchase an undervalued home in Orange County,” said Mark Boud, owner of the Irvine consulting firm Real Estate Economics. “They are grossly undervalued.”

The price increase from last year is mostly attributed to fewer distressed properties; DataQuick reports that 28.2 percent of resales in February were foreclosures (properties that had been foreclosed on at some point in the prior 12 months), compared with 41.9 percent in February 2009 and OC’s peak of 46 percent in January 2009.

Boud says that this price increase, though, should not be characterized as appreciation. “It’s more a reflection that Orange County is running out of distressed inventory,” he said.

The rest of Southern California is showing similar gains. The median price of a Southern California home was $275,000 in February, according to DataQuick — up 10 percent from $250,000 in February 2009.

OC prices have fluctuated in the last few months, but experts say that’s typical during a rebound. The median price has actually dropped three out of the four past months, including a dip from $425,000 in January to $417,000 in February.

“There will definitely be some volatility, and that will continue for a while,” said Boud. He anticipates that the market will have a total of 3.2 percent true appreciation in all of 2010. “2010 is a stabilizing year,” he said.

Some experts believe it may be too early to say this a true housing recovery, as the federal home buyer tax credit is set to expire in April and low interest rates may not hold for long.

“These aren’t market-based fundamentals,” said Patrick Duffy of MetroIntelligence Real Estate Advisors. “It’s too soon to call this a rebound because of all the fiscal stimulus propping up the market.”

But with Southern California sales above year-ago levels for the 20th month in a row, many are now optimistic.

Tags: home prices, housing, Real Estate, recession

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