Home prices rising; sales numbers slow

New report shows increases in most Newport-Mesa neighborhoods.A new batch of home-price statistics released Thursday showed that though December marked yet another month of rising home values for many Newport-Mesa neighborhoods, the volume of home sales appeared to be slowing down.

“Houses are going to be on the market a little bit longer than they were last year, but they will sell,” predicted G. Christopher Davis, director of the real estate management program at UC Irvine’s Paul Merage School of Business.

Between December 2004 and last month, Orange County median home prices climbed by almost 13% to $621,000. Countywide, the volume of home sales dipped by about 9% over the same period. The statistics were compiled by DataQuick Information Services, a La Jolla-based company that tracks real estate sales.

Much of Newport-Mesa echoed the countywide trend. One example is the ZIP Code that includes north Costa Mesa: December’s median home price was about $713,000. Compared with the same month in 2004, that figure marks a median price increase of more than 16%. However, the number of home sales in that area was down by more than 22% when compared with December 2004.

The numbers showed similar trends in the ZIP Codes that include south Costa Mesa, central Newport Beach and Newport Coast. Corona del Mar and West Newport homes bucked that trend. In those neighborhoods, median prices and sales volumes registered year-over-year increases.

Numbers were not available for the area that includes Balboa Island. Median prices dropped in the area that includes the eastern Balboa Peninsula, but the numbers only showed one sale in that area.

Coldwell Banker broker associate Derik Brian said a December slowdown is typical and was more noticeable in 2005 than the previous two years. He said the market tends to be more brisk around March, April and May.

Davis has said in the past that he expects the home market to calm down. On Thursday, he repeated his expectation that price increases will continue but at a gradual rate.

Countywide, Davis expects home prices to grow by a single-digit percentage this year. Similarly, First Team Real Estate agent Kent McNaughton expects moderate growth over 2006.

“It’ll just chug along,” he said.

However, Davis said home buyers should not anticipate rapid gains in the near future.

“Those who had pipe dreams six months ago about what they could sell it for are going to be disappointed,” he said.