Prices continue to break records

Alicia Robinson

A record-breaking year for home sales locally and across the state in

2003 will be followed with more of the same, although affordability

is expected to become more of a problem in 2004, housing industry

experts said.

Median home prices in Newport Beach and Costa Mesa climbed 58% and

12% respectively in November, compared with the same month in 2002,

data from the Orange Coast Assn. of Realtors showed.

In Newport Beach the median single family home price was $1.9

million, jumping from $1.2 million in November 2002, said Diane Ward,

who manages the multiple listing service for the Orange Coast Assn.

of Realtors.

Costa Mesa median prices also rose since last year, up from

$500,000 in November 2002 to $560,000 in the same month this year,

she said.

“I thought first of all 2003 was a banner year, there’s no

question about that,” said Kent McNaughton, a Newport Beach sales

executive for First Team Real Estate.

With inventory levels remaining low and buyer confidence high,

strong sales will last through 2004 and possibly into 2005 and

beyond, he said.

McNaughton saw his business triple this year as the lack of

available housing pushed more prices into his market, which is homes

valued above $3 million.

Statewide, this was the third straight year of housing sales

increases with 2003 showing the highest number of sales transactions

in California history, said Leslie Appleton-Young, chief economist

for the California Assn. of Realtors.

The California housing market will remain strong in 2004, although

a 2% drop in sales is projected due to an expected increase in

mortgage rates, she said.

“We think that’s going to start to cool the market a little bit

because first-time buyers are having difficulty getting into homes

that are appreciating from 15% to 25%, depending on the area,”

Appleton-Young said.

No relief is expected in the short supply of homes, and the

affordability index could drop to 19% in 2004, down from the 27% of

California households that could afford to buy the median-priced home

this year, she said.

* ALICIA ROBINSON covers business, politics and the environment.

She may be reached at (949) 764-4330 or by e-mail at

[email protected].