Newport Beach, CA -- (SBWire) -- 12/13/2010 -- As the first quarter of 2010 draws to a close, real estate experts are quick to note the progress made by beachside cities like Newport Beach in the housing market. While still a long way behind its peak, achieved just before the housing crash, Newport Beach real estate is seeing significantly more activity this year compared to much of 2009. Many believe that while it may take years to fully recover, the luxury real estate market is on a slow but steady path to stability.
There are currently 927 Newport Beach homes for sale, 384 of which are foreclosures. This brings the rate to roughly 30%, slightly below its average for most of the previous year. In 2009, distressed home sales made up a large chunk of the city’s inventory, with thousands more on file waiting to be listed. However, with increased buyer interest due to below-market prices, Newport Beach real estate has seen more buyer activity and the rate of distressed home sales began to drop.
Another good sign for Newport Beach is the rise in median home prices, a slight 1.9% increase compared to a year ago. This time last year, a Newport Beach home would cost around $1.21 million, whereas the median was at $1.46 million as of the latest report. While homes went for much more—up to $4 million on average—before the recession struck, Newport Beach homes remain on the upscale range in Orange County, where median home prices are currently at $490,000.
Newport Beach short sales and foreclosures were also up in value, although they trail behind South Coast cities such as Laguna Beach. The latest median price for distressed homes is $864,500, up 2.3% from last month. This makes Newport Beach homes a more attractive choice for first-time home buyers, as it lets them take advantage of the home buyer tax credit. The credit only applies to homes under $800,000, which rules out much of the inventory in other cities where even distressed homes sell for over a million.
Mortgage rates also play an important role in increasing Newport Beach home buying activity. Interest rates for fixed-rate mortgages, both on 15- and 30-year terms, are down from last week: 15-year rates went from 4.578% to 4.560% and 30-year rates dropped from 5.132% to 5.115%. On the other hand, rates are up for adjustable-rate mortgages, rising from 3.362% on average last week to 3.72% as of March 15th.
Average values for Newport Beach homes are also on an upward trend. According to real estate information provider Zillow.com, the typical Newport Beach home cost $1.21 million last year, whereas the same property would now go for $1.47 million. This is partly because of the lower rate of distressed sales, and partly because even distressed homes themselves are fetching higher prices in Newport Beach real estate.
Lower prices, less risk, and more attractive financing all contribute to the potential market activity in Newport Beach. Government support, in the form of tax credits and assistance, is also expected to be crucial in reviving the city’s housing market. With such a strong set of positive factors, Newport Beach real estate is set to appeal to a wide range of buyers, from first-time homeowners to seasoned investors, as 2010 draws on.
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Newport Beach Luxury Homes: Why Now Is the Best Time to Buy
As the first quarter of 2010 draws to a close, real estate experts are quick to note the progress made by beachside cities like Newport Beach in the housing.