Orange County, Calif., home sales dipped in February, a time when sales typically rise, a new housing report shows.
Not because there were too few buyers, local agents say, but because there weren't enough homes for sale. So few homes for sale, in fact, that listings were at a four-year low in Orange County and throughout Southern California.
Home prices, on the other hand, went up, buoyed by strong buyer demand amid signs the housing market is off to a strong start in 2017 despite the sales dip.
The median price of an Orange County home, or the price at the midpoint of all sales, was $645,000 in February, according to Irvine-based data firm CoreLogic. That's up $10,000 from January and up $35,000 from February 2016, a 5.7 percent year-over-year gain.
The gains continue a nearly five-year run of steadily rising home prices.
Prices were up regionwide as well. The median price of a Southern California home increased 7 percent year over year to $460,000.
Orange County home sales, meanwhile, fell to 2,265 houses, townhomes and condos last month. Not only was that down 2.2 percent from the February 2016 tally, but it was down 3.7 percent from January as well.
Sales have decreased from January to February 11 times in the past 30 years, CoreLogic figures show.
Home sales also were down throughout Southern California, falling 1.7 percent to 14,891 transactions, CoreLogic reported. The data firm reported sales declines in five of six counties in the region, with San Bernardino County the sole jurisdiction with a sales gain. Transactions there were up1.2 percent.
Low inventory was the most likely culprit.
Orange County had about 4,500 homes selling in the multiple listing service, 500 fewer than in the same period last year, and 1,000 fewer than in February 2015, according to Steve Thomas of ReportsOnHousing.com.
Just over 32,000 homes were for sale in Southern California as a whole, almost 5,600 fewer than last year and more than 8,200 fewer than in February 2015.
"I think there would be significantly more demand if supply was more normal," said Jon Pugh, team leader for Keller Williams Realty in Huntington Beach.
Other factors also disprove any sign the housing market is weakening.
CoreLogic Research Analyst Andrew LePage noted, for example, that February had one less day to transact business this year than last year. On a daily basis, sales were slightly higher. Ten inches of rain in January, when most February deals were signed, also could have put a damper on home shopping that month, further decreasing February closings.
And a separate report from the California Association of Realtors had conflicting results. The CAR housing report showed house sales in Orange County actually increased 0.3 percent last month, with sales gains reported throughout the region and state.
The lack of homes for sale likely will create upward pressure on prices throughout the year, said CAR senior economist Jordan Levine.
"Inventory is tight and is going to get tighter," Levine said. "We did have a strong start this year. January and February had growth in closed transactions."
Levine said home shoppers who planned to buy later this year are rushing to close transactions now amid predictions mortgage interest rates will continue rising.
Thomas' estimated time to sell all the homes on the market fell as low as 50 days in February, the lowest that benchmark has been in almost four years. He called today's market demand "scorching hot," especially for homes selling for $750,000 and under.
Earlier this month, Orange County had 627 homes selling for $500,000 or less, half the number selling for that a year ago.
An Aliso Viejo condo with cathedral ceilings, an open floor plan and dual master suites sold last month at $500,000 — $5,000 over the asking price — after one week on the market. Pugh, the Keller Williams agent who listed that home, said he and the seller rushed the property to market "on hyper speed" to take advantage of low inventory.
"We're in a world where sub-$500,000, you can find it, but it's not really appealing, and there's not a lot of it," Pugh said. "There's enough demand that anything will sell when it's priced right."
Irvine agent Steve Snyder said today's market is "like a perfect storm for people who are selling their homes right now" because interest rates still are low and because there's little competition from other sellers.
Snyder, who works with First Team Real Estate, helped a family with two children sell their one-story house in Lake Forest and buy a bigger home. The first house sold in under a month with multiple offers, he said. But when the family switched from being sellers to buyers, "that was a whole different ballgame."
He advised them to pay the asking price in most cases.
"This isn't a time for negotiating if (the home has) a fair price," Snyder said. "They need to give sellers what they want because they have other people coming around the corner."
