Record Month Caps Booming Year for Home, Condo Sales

The San Fernando Valley residential real estate market capped a booming year by showing record sales in December, the Valley Board of Realtors reported.

In December realtors sold 1,106 single-family homes, for an average price of $184,000, an all-time high. Sales were up 50.9% from a year ago and 14.3% over November. Prices were up 13.6% from a year ago and 1.8% from November.

Realtors sold 248 condos in December, and perhaps as a result, prices slumped slightly from the previous December, to an average of $108,300. Sales were up a whopping 98.4% from a year ago and 27.8% from November. Prices were down 3.6% from a year ago and 6.0% from November.

“We haven’t seen this kind of activity since the 1970s,” board President Steve Raynor said.

Fueled by Low Interest

Real estate experts have said all year long that the strong Valley resale market was due mainly to low-interest rates and a dearth of new homes.

Raynor noted that residential sales usually taper off during December, and that the 1,354 sales overall in December easily exceeded the prior record, which was 966 in 1977. The all-time record for any month was 2,559 sales in April, 1979.

For all of 1986, Valley realtors sold 13,985 single-family homes, up 23.5% from 1985, and 2,487 condos, up 36.8% from 1985. Overall, 16,472 residences were sold, the third highest annual total in the board’s 63-year history.

“1986 was absolutely bloody marvelous,” said James R. Gary, whose Woodland Hills real estate firm bears his name. “Our residential resales were up 71% over 1985.”

The Valley board, California’s largest real estate board, reports sales of houses and condos by its 8,100 members in the area from North Hollywood to Agoura. Its statistics do not include most new residences, which are generally sold without a realtor, or homes that are sold by their owners.

Good Year for Bankers, Too

Realtors were not the only ones who found 1986 to be a strong year for residential real estate. Roger Gertz, president of Fallbrook Mortgage Corp., a mortgage banker in Canoga Park, said his firm produced $500 million in mortgages in 1986, up 40% from 1985. And, he said, “1987 is going to be bigger than 1986.”

Gertz and Gary said home sales were spurred by the low interest rates and the new tax law, which removed many longstanding deductions but preserved the deductibility of mortgage interest, making home ownership even more attractive.

Gary said 1987 should be particularly strong for more expensive homes. More affluent buyers, he predicted, will seek the most expensive homes they can afford in order to maximize that deduction.

The board noted that the overall supply of single-family homes for sale in the Valley is not keeping up with the demand. There were 4,499 houses for sale at year end, down 15.4% from November, the board said, and off 9.9% from a year ago.

There were 1,727 condos available for sale at the end of December, down 10.8% from November but up 12.3% from a year ago.