Numerology seeks to uncover truth through various measurements of economic and real estate trends.
Buzz: In a time when home sales are sluggish, a community of 43 single-family homes in San Juan Capistrano sold out in under 10 months.
Source: Gathering data from CoreLogic and Zonda, my trusty spreadsheet analyzed home sales data.
Fuzzy math: Why are builders experiencing better success in home sales compared to the existing housing market?
Topline
The Petra neighborhood, situated just south of the 5 Freeway/Ortega Highway interchange, featured detached houses ranging from 1,759 to 1,964 square feet with three or four bedrooms and two-and-a-half bathrooms. The average contracted price was $1.24 million.
“Demand for our new single-family detached homes at Petra was incredibly strong from the start and continued throughout the project’s timeline,” said Patrick Higgins, a Landsea vice president.
Petra achieved a pace of four sales per month, outperforming the typical project in Los Angeles and Orange counties where the average sales rate is 3.3 sales per month, as reported by market tracker Zonda. Furthermore, this regional sales speed has increased from 1.9 sales per month in 2019 to 2.9 sales per month in 2017.
“Considering historical data and current market trends, Landsea’s San Juan Capistrano community performed exceptionally well,” said Ali Wolf, Zonda’s chief economist.
Details
Overall, homebuying has declined due to mortgage rates nearly doubling to around 7% within the past year.
Builders have fared better in sales by reducing prices, offering assistance with closing costs and rate buydowns, and having available homes for sale.
The resale market has stagnated due to unaffordability, causing even current homeowners to hesitate from making new purchases and effectively reducing the number of homes on the market.
CoreLogic’s report on Orange County home sales in June revealed that builders completed 1,054 sales. Although this represents a 12% decrease from the previous year, it is notable that resales of existing homes experienced a 31% decline during the same period. As a result, builders claimed a 9.1% share of total sales, up from a 7.3% share the previous year.
Additionally, consider pricing: new homes sold in June had a median price of $1.16 million, marking a 21% decrease from the previous year. On the other hand, the overall median price in Orange County increased by 3.3% to a record $1.06 million.
Bottom line
Anticipate new home sales to outperform in the upcoming months.
Zonda reports that LA-OC builders put 38% more houses under contract in June compared to the previous year.
Meanwhile, Realtor.com revealed that pending sales of existing homes in Orange County were down 18% year-over-year in June.
Jonathan Lansner is the business columnist for the Southern California News Group. You can reach him at [email protected].
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