Real estate bubble still hasn’t burst

Deepa Bharath

Local Realtors are optimistic that the real estate boom they say

started about five years ago won’t bust in the near future.

The California Assn. of Realtors reported Monday that the median

home price in Orange County in December was $433,960, higher than the

median home price in Los Angeles and San Diego counties. The Orange

County median remained unchanged from November.

Home prices in Newport-Mesa, too, seem to reflect that steady

trend, local real estate agents said.

Balboa Island Realtor Bill Hardesty, who has worked in the area

for about 40 years, said he has seen no indication of home prices

dropping on the island or anywhere in Newport Beach. He said that, as

of Monday, 15 homes were listed on Balboa Island with an average

price of about $2.5 million.

“I don’t think they’re ready to come down yet,” he said. “I think

it’s going to continue going up, but it may be a somewhat slow rise.”

Hardesty said his last sale closed out at $1.25 million for an

inside lot.

Costa Mesa has seen dramatic increases in home prices over the

last few years, said Rhonda Daniel, who has sold homes in Costa Mesa

for the last five years.

The huge leap in prices came around 1996 and 1997, she said. They

have skyrocketed since and have become more or less constant now,

Daniel said.

“It slowed down some time around Thanksgiving,” she said. “Not

that it’s gone down. But we’re at a time when people think prices are

going to come down. In my opinion, they won’t come down.”

Daniel said she has met several clients who believed the bubble

was going to burst two years ago.

“But it didn’t,” she said. “And they’re kicking themselves for

waiting two years to buy a home because now they’ve gone even

higher.”

The median price statewide in December was a record $338,110, up

3.2% over November and 20% higher than the previous December,

according to the report released Monday.

Daniel said her prognosis for Orange County would be more than

positive for the next five years. She said the average price for a

home in Costa Mesa runs between $400,000 to $425,000.

“It’s very difficult to find anything good below $400,000 these

days,” she said. “Even small houses, less than 1,200 square feet, are

selling at that price or more. It doesn’t make sense. But that’s the

way it is.”

* DEEPA BHARATH covers public safety and courts. She may be

reached at (949) 574-4226 or by e-mail at [email protected].