Buyers move into Costa Mesa real estate

As the real estate market cools off in the area, home buyers appear to be opting for Costa Mesa over Newport Beach for less expensive options.

Costa Mesa’s less pricier listings may account for the city’s climbing home and condo prices as more beginner buyers hunt for affordable homes, said Kurt Galitski, vice-president of Costa Mesa-based Weichman Associates Realtors.

“It really comes down to affordability and Costa Mesa is much more affordable than Newport Beach,” Galitski said.

In July, DataQuick Information Services, a company that tracks real estate sales in the state, reported the median price of new and resale properties were up almost 5% in Costa Mesa, something Galitski said might be driven by a buyer’s market.

Real estate agent Betty Parker said she thinks the waning numbers in Newport Beach are normal, especially after the recent real estate boom.

“This trend is pretty normal after we have a really hot market, there seems to be Â… an evening out,” said Parker, who has worked in the industry for 30 years. “I think what happens is our prices go up so fast and the housing market increases so rapidly and we outdo the increase incomes, and now we have to catch up.”

While the report showed Corona del Mar’s median increased about 1%, it showed that both Newport Beach and Newport Coast figures decreased. Newport Coast had the most dramatic slump, with median prices decreasing more than 5%.

“If you look at it like a pyramid, and the bottom is based on affordability, that’s where all the buyers are,” Galitski said. “If you’re an entry-level home we have a greater pool of buyers, and because there’s more competition for entry-level homes among more buyers, that’s what continues to drive the price up.”

According to the Newport Beach Assn. of Realtors, houses in Newport Beach sold for less than the listed price in June 2005 and 2006, and that both average and median prices dropped.

“It’s better to look at it like this, you can buy a property — let’s say the low end is $889,000 Â… but on the other end of the spectrum, the high price is $15 million — so there’s a whole slew of variations in between that low price and that high of a high price,” said Patricia R. Moore, the association’s executive vice-president about the difference between average and median prices.

Galitski said the pool of buyers who can afford property in Newport Beach is smaller, but less concerned with prices and interest rates.

Those who purchase newly constructed properties to sell for profit also have an effect on the market, Galitski said.

“Any time you have new construction — and Newport has a decent amount of new construction — that brings down price,” he said. “The speculators come in to buy out those homes because they speculate they are going to turn a profit by buying the house.”

Sellers need to take time preparing their homes before showing, Galitski said, to compete in the market.

“We’re going through this kind of situation where the seller’s mentality has not changed since last summer,” he said. “Their instinct is to add 10% to the price Â… and that’s not the case today, we still need to be priced appropriately and priced correctly, but most of all we have to outshine the competition.”

Galitski suggested sellers do their homework and check out other properties for sale in the community before they list their home.

LOCAL HOUSING FIGURES

city

units sold

June 2005 median price

June 2006 median price

change

ORANGE COUNTY

3,388

$600,000

$640,000

6.67% increase

COSTA MESA

70

$677,000

$710,000

4.87% increase

CORONA DEL MAR

14

$1,712,000

$1,729,500

1.02% increase

NEWPORT BEACH

70

$1,362,500

$1,347,250

1.12% decrease

NEWPORT COAST

21

$2,164,500

$2,050,000

5.29% decrease

— Information from DataQuick Information Services