Favorable Signs : Increase in Home Sales Seen for ’86
Low mortgage rates and moderate price increases will boost home sales in the San Fernando Valley area this year beyond 1985’s heavy volume, real estate experts predict.
“I think we’re going to have a very good year, perhaps the best year since the late ‘70s,” said Temmy Walker, president of the San Fernando Valley Board of Realtors.
“Houses are probably more affordable now than in four or five years,” said Daniel Nelms, senior vice president and chief lending officer for Valley Federal Savings & Loan in Van Nuys.
Rising Prices
Nelms and several other experts agreed that increased demand stemming from low interest rates will push up home prices by a relatively modest 4% to 5%. But a few experts said they expect strong demand, low interest rates and lack of construction to push prices up more.
For example, Michael Glickman, whose Mike Glickman Realty has offices in Tarzana and Sherman Oaks, forecast an average price increase of 8% to 10%. Glickman was even optimistic that the condominium glut will ease.
Kathleen King, general manager of King Realty in Sherman Oaks, agreed, saying: “Condos won’t continue to be a disaster in 1986.”
But most real estate specialists said the condominium glut will persist, with little relief in sight for sellers.
Condos in Trouble
“It’s a disaster,” said Roger Gertz, president of Fallbrook Mortgage in Canoga Park, which he said does $300 million a year in single-family lending. “The lenders don’t want them, the people don’t want them. . . . Too many were built.”
Another realtor said bluntly, “I’ve got to believe that that market is soft indefinitely.”
Last year’s overall strength in the Valley’s residential real estate business is reflected in statistics compiled by the San Fernando Valley Board of Realtors.
In 1985, the board said, 13,140 houses and condominiums were sold by its members in the area between the Santa Monica and Santa Susana mountains from North Hollywood to Agoura. That is more than in any year since 1979, when 19,964 were sold. The figures exclude most new homes, which tend to be sold by developers.
The board said the average sales price in 1985 was $151,136 up 3% from 1984. That is the same percentage increase as in 1983 and 1984.
Best Deals
One Valley real estate specialist said the best deals for buyers this year might be in small houses, such as two-bedroom models that are common in Sherman Oaks and Studio City. He said the market for such houses has been flat for several years.
Realtors said such houses typically have 900 to 1,000 square feet and sell for between $110,000 and $160,000, depending on location and condition. They are 30 to 50 years old and well-built, but often have old-fashioned kitchens and fixtures.
“As little as seven years ago you could buy them for $50,000,” said Walker, who bought some herself in those days and is holding them for her children.
Home building was strong in the area last year, real estate experts said. No statistics were available, but Raymond Sealy, executive vice president of the Los Angeles division of the California Building Industry Assn., said builders are putting up mostly apartments and condominiums.
Sealy said that, because of uncertainty over the possible revision of federal tax laws, housing starts in 1986 should be off slightly from 1985. Sealy added that most of the single-family construction in the Valley area currently is in outlying areas such as Valencia, although recently there has been some in Sun Valley and Sylmar.
