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OC Home Prices Climb Steadily

Orange County's median price is up by more than 15 percent over last year, reflecting an ongoing statewide trend.

In Orange County, home prices rose 3 percent between July and August, mirroring a climb in median prices statewide, the California Association of Realtors announced Monday.

In August, the Orange County median home price reached $567,710. That was 11.6 percent higher than August 2011, when the median was $508,910.

Statewide, the median price was $343,820 last month, compared to $333,860 in July – a 3 percent bump. The year-over-year increase was 15.5 percent. In August 2011, the median price of a single-family unit in California was $297,660.

It's the sixth straight month that median home prices have risen across the state, according to CAR. The median represents the point at which half of homes sell above a price, and the other half below it.

"The median price is gaining in part because of a shift in the mix of what is selling," said CAR Chief Economist Leslie Appleton-Young. "The increasing share of sales in higher-priced coastal markets at the expense of the inventory-scare distressed markets has been the primary factor in fueling the statewide median price.

"While higher-priced markets with a robust economy are experiencing a strong demand in equity sales and posting double-digit year-over-year price increases, sales in lower-priced markets that rely more on distressed properties were stagnant or even declined, as the inventory of (bank-owned) properties continues to wane."

TELL US WHAT YOU THINK IN THE COMMENTS

Do you think this upward swing in prices will last?

— City News Service

lisad4re September 18, 2012 at 04:18 PM
I have followed the RSM inventory numbers for over 16 years and there has NEVER been this few homes available to purchase. A healthy number for homes in the area covered by SAMLARC is 150. For the past 6 months we have been averaging 40 properties on the market. I saw the lowest number, 27 properties two weeks ago.
Mercury September 18, 2012 at 05:42 PM
It's crazy in Foothill Ranch as well. There are no homes for sale, and when one goes up people swarm all over it. And people are still getting great deals. I wonder why they don't just raise the prices dramatically.
Kevin Kellerman September 18, 2012 at 09:36 PM
Mercury: for prices to go up dramatically, you need "comps" which are based on sold properties. Banks won't lend on a property that does not come close in price to the comps. Thus, the price increase takes time, which is a good thing.
MFriedrich September 22, 2012 at 05:40 AM
Banks benefit from the lack of inventory. Buyers bid up the prices on what little is available, and the banks recover more capital to shore up their horrendous balance sheets that are chock full of rotten loans. By restricting supply and raising prices, banks slow the rate of their REO liquidations. Banks are hoping that rising prices will trigger a self-fueling price rally as sidelined buyers enter the market for fear of being priced out. Buy now or be priced out forever. Gee, that schtick sounds awfully familiar doesn't it? It's a favorite among realtors.
Jim Clay September 29, 2012 at 09:53 PM
While there may not be much inventory, it's nice to see things moving after the last few years in the economy. That's a good sign I would say. Hopefully the homes sells will continue, but the economy is still fragile, so hopefully prices' don't jump to dramatically or buyers won't be to willing to jump in.

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