Homes prices across state hit new record high

Andrew Edwards

Home prices across California hit a new milestone in April but have a

long way to go to catch up with Newport Beach, which was listed as

the fifth-most-expensive city in the state to buy a home.

For the first time, median home prices in California broke the

$500,000 barrier, reaching $509,230, according to figures released

Tuesday by the California Assn. of Realtors.

“This is a heck of a year,” association deputy chief economist

Robert Kleinhenz said.

Newport Beach was one of the state’s priciest cities, with a

median home price of $1,297,500. Nearby Laguna Beach, in third place,

was even higher at $1,485,000.

The California Assn. of Realtors numbers tend to be higher than

statistics released last week by La Jolla-based real estate trackers

DataQuick Information Systems. DataQuick’s figures showed the median

Orange County home price for April at $576,000. The association

reported the median Orange County home cost more than $682,000.

The numbers are different because the association tallies only

prices for single-family homes that have had at least one owner,

Kleinhenz said. DataQuick numbers include new homes, condos and

attached homes.

Similar to last week’s DataQuick report, Kleinhenz said home

values are rising at a more level rate than last year. In April 2004,

association statistics showed the median Orange County home price was

about 38% higher than April 2003 prices. This April, the

year-over-year price increase was 5.7%.

Four key factors affecting local home prices, Kleinhenz said, are

a somewhat greater number of homes on the market than last year; low

mortgage rates; general economic trends, such as a strong job market;

and repeat home buyers using equity gains to buy new houses.

In Newport-Mesa, the number of homes on the market remains fairly

low, said Peter Hernandez, president of Coldwell Banker Orange

County. He said 97 Costa Mesa homes were up for sale, and 248 Newport

Beach homes were on the market Tuesday.

Hernandez did not have 2004 figures available but said many more

houses were available around this time in 2003. Then, Costa Mesa had

166 homes on the market, and Newport Beach had 413.

Homeowners considering a move can be discouraged from putting

their house up for sale when houses seem scarce, Hernandez said.

People may worry about not being able to find a new house at the same

time they sell their current home.

“They kind of want to have a place to land,” he said.

Mortgage rates went down last week. Mortgage company Freddie Mac

reported Friday the average rate for a 30-year fixed mortgage was

5.71%, a slight dip from the week before.

An increase in rates, to about 6.5% or 7% could shift demand from

homes to apartments, Arnel Management Co. president Steve Mensinger

said.

Mensinger’s company manages apartments in Costa Mesa and other

cities. In Costa Mesa, he said the average rent for a two-bedroom,

two-bathroom apartment is $1,295.

Mensinger believes the most important variable affecting home

prices and rents is employment, since people won’t want to live in

places where jobs are scarce.

“Job growth trumps all,” he said.

* ANDREW EDWARDS covers business and the environment. He can be

reached at (714) 966-4624 or by e-mail at andrew.edwards

@latimes.com.