For the last twenty-four months, sales of new-homes in Orange County shot up at a very healthy rate.
According to numbers from CoreLogic, a real estate data analysis company, new home sales have dropped in Orange County for 10 consecutive months, with sales volume off by 21 percent. It’s not all negative though as existing home sales grew by 10 percent in the same period.
What is special about the decrease in new-home sales is it is limited to just Orange and San Diego counties.
Builders were pleased with sale of new-homes in Riverside and San Bernardino counties, as they increased by 20 and 23 percent, respectively. On a national scale, sales of new-homes rose 17.5 percent which means desirable Orange County went in the opposite direction in terms of new home sales.
Some real estate experts believe the reason is that prices went up too fast. Additionally, foreign buyers such as those from China, who comprised a big chunk of new home buyers in the last few years, are starting to diminish.
In 2013, a couple of large projects were started; Pavilion Park at Great Park Neighborhoods in Irvine with 726 homes and Sendero project with 941 residences at Rancho Mission Viejo. They each had pretty much all of their homes sold by the start of 2015.
Sales prices out of reach for many
Corelogic’s data shows the median price of a brand new Orange County home reaching an all-time high of $909,000 in February 2015. As a whole, the median price is $835,000. Perhaps buyers are simply upgrading the home they buy at a lower cost.
The prices for land are backing builders in a corner with them having to construct a very large home on a relatively small lot at a high price, and that may also have turned some buyers towards existing homes with larger lots.
According to MarketPointe data numbers, sales contracts to buy condos and townhomes increased by 23 percent in 2015, whereas detached home purchase contracts fell 0.2 percent.
Nevertheless, many feel that there will be a recovery most likely towards the early part of 2016.