Low mortgage rates, high demand and a shortage of entry-level homes have pushed Orange County house and condo prices back to the June 2007 peak of the housing boom.

The median price of a home – or price at the midpoint of all sales – hit $645,000 in April, making Orange County the first Southern California county to get back to pre-recession prices, according to CoreLogic data.

The market milestone followed a four-year, 54 percent run-up in home prices since the housing market bottomed out for a second time in 2012.

But nine years later, today’s market has little in common with the housing scene of ’07 apart from that $645,000 price tag.

For example, monthly house payments are lower today, averaging $406 less in April than in June 2007 because of historically low interest rates, CoreLogic reported.

“It’s hard to break out too much party gear when you realize it took nine years,” CoreLogic research analyst Andrew LePage said. “It’s meaningful, but it doesn’t mean everybody’s house is worth what it was back then.”

And getting back to the record price “doesn’t mean we’re re-creating the bubble,” added broker Bob Hunt of Keller Williams Realty in San Clemente.

“We all know how that was fed by the crazy financing that was available” during the housing boom, Hunt said in an email Tuesday. “It’s nothing like that now.”

In addition, nine years of inflation means that 2007 median of $645,000 is equivalent to $744,000 in today’s dollars, or $99,000 more.

Happy sellers, frustrated buyers

At open houses around the county on Saturday, there was little talk about market milestones and more concern about the lack of affordable houses for sale.

“A lot of people are trying to get a house right now because interest rates are low,” said Taqialdeen Zamil, 27, of Anaheim.

Zamil was part of a steady stream of house hunters traipsing through a three-bedroom 1950s Garden Grove house listed at $599,000.

Broker Matthew Shinn of A-Plus Realty said he got eight offers for the house in six days.

“The market is very hot,” Shinn said. But, he added, “it’s very competitive for the buyers.”

After getting outbid on eight homes over the past month, Robert Nguyen had a different view.

“These guys are taking over the asking price, full-cash offers,” said Nguyen, 35, a Garden Grove resident looking to buy with his wife, Julie Vo. “I wonder how many people are going to come in and pay $40,000 to $50,000 over the asking price.”

“It can be disheartening,” added John Tyler, 34, an Orange renter who’s ready to own a house with his wife, Shiloh, their 5-year-old daugther, Camila, and their puppy, Harley. “But you have to go back in there and keep looking.”

Last month’s median was up 7.5 percent, or $45,000, from the previous April.

Buyers noted that the longer it takes to buy a home, the more they pay. Especially this time of year, the peak months for housing transactions and price hikes.

Zamil and his wife, Sara Tabbaa, stopped looking last year when their daughter, Shaam, was born.

When they started looking again two months ago, it seemed that prices were up as much as $100,000.

“I think people are listing at high prices – more than it’s worth,” Zamil said.

Rising prices, coupled with few homes for sale, may be discouraging buyers.

Orange County home sales fell 6.5 percent to 3,285 transactions in April, CoreLogic reported. Sales have dropped year over year just one other time in the past 14 months.

While April’s transaction tally is robust compared with June 2007’s total of 2,641, it’s 34 percent below the April average.

LePage attributed sluggish sales to a lack of affordability, inventory and mortgage credit.

Less home, more cost

Meanwhile, job growth, household growth and low mortgage rates are fueling demand, LePage said.

Mark Boud, president of San Clemente-based Real Estate Economics, said Orange County’s housing demand is growing faster than the number of new homes because of rising employment here.

That, he said, is “keeping prices at the currently high levels.”

Hence, the price of entry-level homes now is $500,000 to $750,000, said Steve Thomas of ReportsOnHousing.com.

The result is buyers settling for smaller homes. The median price for a condo was up 8.7 percent in April, compared with a gain of 3.7 percent for houses, CoreLogic figures show.

“Townhomes are appreciating like crazy, which is typical when things aren’t affordable,” Thomas said. “When people can’t squeeze into a house, they go the condo route.”

Region still below peak

Several Bay Area counties have been back to price peaks for months, while San Francisco home prices surpassed pre-recession peaks more than a year ago, LePage said.

But Southern California’s market has been slightly less robust, remaining 9.3 percent below the peak.

By comparison, home prices in Los Angeles and San Diego counties remain 5.5 percent below their respective peaks, LePage said. Prices in Riverside County are 23.6 percent below that county’s peak, while homes in San Bernardino County are selling, on average, for 28.9 percent below peak levels.

Perhaps lost in this latest round of price gains are a tiny group of homeowners who bought at the top of the market, yet somehow hung on while their homes steadily dropped in value after the crash.

CoreLogic reported that 12,930 households, or 2.4 percent of all mortgage borrowers, still owned homes worth less than they owed to lenders at the end of 2015.

By comparison, 82,586 households, or 15 percent of borrowers, were in similar circumstances at the end of 2012 when the current price run-up began. Rising home values rescued many of these “underwater” homeowners.

So what happens next?

Most observers see continued price gains, but at a less frenzied pace. And little chance of a new bubble any time soon.

“Despite the currently high level of home prices in Orange County, we don’t see a lot of upside in terms of price appreciation,” said Boud, the real estate economist. “Going forward, the result will be modest but continued positive price appreciation rates for the next few years in Orange County.”

Contact the writer: 714-796-7734 or jcollins@ocregister.com