Home prices show signs of cooling

Local real estate values appear to have cooled off during the hot

month of July, though homes in south Costa Mesa marked a pricy

exception.

Real estate statistics showed that in July, most Newport Beach

homes commanded median sale prices above July 2004 prices. However,

July values dipped from June’s numbers around Newport. That was not

the case in south Costa Mesa, where median home prices broke the

$700,000 barrier.

Local home price figures were compiled by La Jolla-based DataQuick

Information, a real estate tracking company.

In south Costa Mesa, the median price for a house or condo in July

was $729,000, a 28% increase above the July 2004 number. July’s

median price marked a more than $80,000 increase above June values.

North Costa Mesa’s median home price dipped slightly, from

$675,000 in June to $667,500 in July. That marked a 6.8% increase

from July 2004 prices.

Valerie Torelli, owner of Costa Mesa’s Torelli Realty, said the

simple economic force of supply and demand has bolstered Costa Mesa

prices.

“There’s absolutely no inventory. In the entire city of Costa

Mesa, there’s less than 100 houses,” she said.

Torelli thinks high prices -- which lead to high property taxes --

have made Costa Mesa homeowners reluctant to move into more upscale

homes. “If they move within the area, they’re slammed with property

taxes,” she said.

Costa Mesa homeowners who are putting their houses on the market

want top dollar. Torelli said the least expensive home up for sale in

the city has an asking price of $695,000.

In most parts of Newport Beach, statistics show July home prices

were higher than July 2004 figures. The exceptions include the ZIP

Code that includes Eastbluff and Big Canyon, where year-over-year

prices dropped 8.4% to $1,225,000. Numbers for Balboa Island were not

available.

Outside of Corona del Mar, all other Newport ZIP Codes experienced

double-digit median home price increases in July when compared to the

same month last year. However, median prices dropped from June to

July throughout Newport Beach.

“I don’t think its any secret that the rate of appreciation is

beginning to moderate,” said Bob Chapman, president of the Newport

Beach Assn. of Realtors.

Chapman thinks buyers are becoming more cautious. He believes they

were willing to pay high prices during some of the more feverish

periods of the current real estate cycle because they were expecting

rapid appreciation to provide a return on their investment.

“It’s risky, but there was a trend for awhile that you couldn’t

lose,” Chapman said.

What Chapman said he does not see, or hear people talking about,

is a dreaded bubble. He thinks the market has become neutral, and

buyers and sellers are negotiating prices.

“I do see people realizing that it’s become a steadier market,” he

said.

* ANDREW EDWARDS covers business and the environment. He can be

reached at (714) 966-4624 or by e-mail at

[email protected].