Home sales down in the Newport area

Newport-Mesa’s housing trends are mirroring the rest of the county’s slumping market with home sales dropping compared to last year.

The only place that saw an increase in the number of sales for March was Corona del Mar, according to a report released by DataQuick Information Systems, which tracks home sales nationwide.

“The amount of sales have absolutely gone down and in my opinion it’s two-fold: There is more inventory and also because the lenders have tightened up a lot of the qualifications for first-time buyer programs as well as tightened up on the zero-down programs,” Costa Mesa real estate agent Valerie Torelli said.

Because of the depressed sub-prime mortgage market, many lenders are being more cautious with the offers they give to entry-level home buyers, Torelli said. She’s had escrows delayed because the borrower had to pay off part of his loans as part of a “rapid rescore” so his FICO score would improve.

“Actually, loans got pulled and everything,” Torelli said. “They tightened up and got real crazy … because they changed the guidelines right in the middle of when loans were being processed.”

Despite the setbacks, none of Torelli’s clients’ home purchases were ultimately jeopardized by a withdrawn loan offer.

The sub-prime mortgage issue has not affected Newport-Mesa as much as elsewhere because most prospective buyers are affluent and the sub-prime market targets lower-income customers, said Newport Beach Assn. of Realtors board member Rob Norquist.

“I think maybe it affects the mentality of people … but it hasn’t affected anything with interest rates on what they call ‘paper loans’ — most of the loans here aren’t sub-prime loans,” he said.

According to DataQuick, the price of homes in Costa Mesa went up 5% in March 2007 compared with March 2006, but Torelli said she’s seeing home prices more stagnant than that in the city. Because homes that are more expensive have not been as affected by any fluctuations in the past year, sometimes it looks like the price may have increased.

“The lower-priced homes are having a more difficult time selling,” Torelli said. “So the million-plus range is still active.”

According to Torelli’s numbers, 16 homes priced over $1 million sold in Costa Mesa since January, which represented 10% of all homes and condos sold in the city during that time.

“Those people who want to move up still can and do,” she said.

The median price of homes in the county fluctuated only .6%, but in some areas of Newport-Mesa the difference in the median price changed drastically.

“One of the drawbacks in drilling down the median price on the small city level in a high-end area is you can get everything from the older, modest small condo to the … grandest of houses,” DataQuick spokesman Andrew LePage said Friday. “It can do funky things with the median.”

In Newport Coast, the median price dropped over 42%, but LePage said such big declines should be looked at cautiously.

“We’re definitely seeing the volume of sales decreasing and I think that’s across the board for a lot of cities, but what we’re not seeing from a data standpoint is that prices are going down,” Norquist said. “It seems from what we see that prices are actually, if anything, are showing higher.”