Newport home sales booming

Alicia Robinson

December home sales in Newport were the strongest they have been in

18 years, real estate agents say.

Existing home sales in December were down 14.5% in Costa Mesa and

up 30% in Newport Beach when compared with November sales, said Diane

Ward, who manages the multiple listing service for the Orange Coast

Assn. of Realtors.

“I think what really sparked the amount of activity is everyone’s

been trying to capitalize on these lower interest rates,” said Steve

High, president of Strada Properties.

“Our demand has been very high not only through 2003, but our

phones started ringing very quickly in 2004 and we’re off to a very

strong start at this moment.”

The widely divergent figures didn’t mirror state activity, which

rose a modest 1.6% in the same period, and they didn’t align with

national figures, which showed a 6.9% increase. State and national

figures were reported this week by the California Assn. of Realtors

and the National Assn. of Realtors, respectively.

The increase in sales indicates a high level of consumer

confidence, High said.

“The market is excellent,” said Bill Plattos, vice-president of

First Team Real Estate in Costa Mesa.

Many homeowners are interested in selling, but only if they can

find another home to buy, and that’s where the crunch comes in, he

said.

“The reason for the whole situation, somewhat, is the new houses

are not being built fast enough,” Plattos said. “Because of the low

inventory, it’s making the seller think twice before putting their

house on the market.”

Both real estate executives said they expect sales to stay healthy

although interest rates may creep upward later this year.

Some have tried to compare current market conditions to those that

preceded a crash in the early 1990s, but people are putting an

average of twice as much down on a house than they were then, High

said.

With more invested, homeowners are more likely to weather changes

in the market.

“You have to anticipate that people have a much higher staying

power should there be a change in the market,” he said.

Plattos said an interest rate increase might slow sales a little,

but it’s not likely to spark a panic in the market because homes are

a safer long-term investment.

“That’s one of the reasons why the bubble probably won’t ever

occur,” he said. “It’s not like they’re stocks and they’re going to

get rid of it. People want to live in it.”

* ALICIA ROBINSON covers business, politics and the environment.

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

[email protected].