Housing Prices in L.A. and O.C. Soar to Record Highs in March

Home prices in Los Angeles and Orange counties surged last month to new highs for any March on record, showing no signs of slowing down despite rising interest rates and the gyrating stock market.

In Los Angeles County, the median price of all housing--the point at which half the homes are sold for more and half for less--rose 6% to $192,000, according to Acxiom/Dataquick Information Systems Inc., a La Jolla real estate research firm.

The rise in the median price of new and existing houses and condominiums in Orange County was especially vibrant, surging 12% from the previous March to $260,000--the highest ever.

With March marking the start of the home sales season, analysts expect the market to continue to heat up through August as more people search for homes.

This summer, Los Angeles County’s home prices will surpass the previous record of $203,000 posted in May 1991, said John Karevoll, an Acxiom analyst, and prices in Orange County will climb as high as $275,000.

Bolstered by rising consumer confidence and a robust economy, March’s sales also were strong. In Orange County, a record 4,754 homes were sold last month, a 7% increase over the previous March. Los Angeles County reported a 6% gain to 10,168.

The recent housing gains reflect the region’s steady growth in jobs and incomes, but there are concerns about the surge in housing prices that has continued for more than a year.

With each jump in price, fewer families are able to afford a median-priced house. Moreover, the stock market slide that began in March, and the big tumble and partial recovery in the last week, may shake consumer confidence and cause delays in home purchases. Exacerbating the problem is a slowdown in new-housing construction that has lagged demand.

In California, new-home starts are near all-time lows in part because builders face land-use restrictions and environmental barriers, he said.

Nationwide, federal statistics show that new-housing starts fell 11% last month, the sharpest drop for a March in six years.

Among Southern California households with incomes of more than $100,000, purchases of larger homes--those 2,000 square feet or more--are growing a robust 8% annually, according to a study by real estate consultant Dennis Macheski in Newport Beach.

Those buyers have helped push up median prices statewide to $231,710, only slightly off the all-time high of $233,000 reached in January, according to the California Assn. of Realtors.

Median prices of new homes in L.A. and Orange counties led the surge in overall prices in March.

In Orange County, new-home prices rose 21% to $367,000 over the previous March. Prices of existing houses jumped by 11% to $279,000, and condos increased 7% to $169,000, according to the Acxiom report.

In Los Angeles County, new-home prices grew 8.5% over the previous March to $273,000, while the price of resale houses increased 5% to $197,000. Prices of existing condos showed the only decline in the area, dropping less than 1% to $150,000, the report said.

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Home Prices Surge

Los Angeles County’s median home price was the highest for any March. Monthly median prices in thousands of dollars:

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March 1999: $182,000

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March 2000: $192,000

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Source: DataQuick