Buying Surge Moves Homes at a Fast Clip
Santa Claus is coming early this year for hundreds of Southern Californians, but his address book must be in a shambles.
The rapid-fire pace of sales in both the new-home and resale categories means that scores of families will celebrate this Christmas at a new address.
During the present, hectic rate of buying, many Southlanders have made the biggest purchase of their lifetimes, while others are moving up to newer quarters or perhaps moving into smaller dwellings to suit new life styles.
As some wags among the yuppies might say, they’ve already bought their BMW or a Porsche--the second most expensive lifetime purchase--and it’s about the right time to buy the biggest-ticket item, a home.
A reading of the two stories on the opposite side of this page clearly indicates the pace-setting rate of purchases, contrary to the normal sloughing off of sales after Labor Day. This unseasonable activity stems from mortgage interest rates again hovering around the magic 10% mark and plenty of lendable money.
Nationally, the affordability measurement for buying an existing home is at its best level since 1978. The National Assn. of Realtors monthly housing affordability index for September was at 106.6, highest since the June, 1978 mark of 107.8.
Using 100 on the index as the point where a family earning the median income can qualify for a mortgage covering 80% of the median-priced home, the high mark means that the family had 106.6% of the income required for loan qualification.
In the new-home category, sales were up 10.6% in September, breaking a five-month downward slide, and putting the sales rate at an annually adjusted rate of 690,000. Comparatively, it was 624,000 units in August and 924,000 units last March.
Looking about the Southland, there are numerous examples to illustrate the fast clip of sales of new homes.
In San Diego County, the Sales and Marketing Council there reports sales of $87.7-million in new-home purchases during the second quarter, up $32 million over the $55 million reported during the first quarter.
Supporting that data, Safeco Title Insurance reports deed recordings for the sale of 39,825 homes in that border county during the first three quarters of this year, up 2.5% from the same time a year ago. Its nine-month tally of sales--for both new and existing homes--places the pace at its highest level in five years. It breaks down the count to 27,836 resales and 11,989 new homes.
To the north, in Sylmar, the Crescent Bay Co. has sold 60 of 71 town homes in its Crescent Park tract, still under construction but with occupancy scheduled for November.
At Calabasas, the D&S; Co. reports a sell-out of 84 homes at Malibu Canyon Villas.
Century 21 brokers and sales personnel set company production records in Los Angeles, Ventura, Santa Barbara, Kern and San Luis Obispo counties, ringing up $268 million in transactions and garnering commissions of about $7.4 million.
Elsewhere throughout the United States, Canada and Japan, where it has offices, the Irvine-based firm said August was its best month ever for number of sales and volume of real estate sold--$5.3 billion, an increase of 28% from the previous high set in August, 1985.
It cited “single-digit mortgage interest rates, a strong economy and an easing in the mortgage placement logjam” for spurring sales.
Realtor Clark E. Wallace, president of the National Assn. of Realtors and a Moraga, Calif., broker, explains further:
“These improving housing affordability conditions are translating into increased home sales and helping millions of families obtain a key ingredient of the American dream--a home of their own. Additionally, homeowners who have been waiting for years to move up to a larger and/or more expensive home, increasingly are finding that now is a good time to do that.
“As a result, we are seeing a much more mobile population than we did in the early 1980s, when high interest rates stunted the home sales market and prevented thousands of families from making the housing move they desired.”
