House, Condo Prices Hit Record Levels in ‘Colossus’ June
The San Fernando Valley real estate market--which has been getting national attention for record prices and sales--again set records for house and condominium prices in June, the San Fernando Valley Board of Realtors reported Monday.
The average price of a single-family house in the Valley was $248,800 last month. The June figure was 6% higher than the record of $234,400 set in April. In May, the average price of a house was $234,000.
The average price of a Valley condominium hit a record $128,100 in June, up 2% from May’s record of $125,200.
“June was a colossus,” said Fred Sands, president of Fred Sands Realtors. “It was one of the best months we have ever had in the history of the company, and we’ve been around 20 years.”
Why is the Valley real estate market so hot? Real estate agents say it’s a classic case of too much demand and too little supply: Low interest rates and a burgeoning population are behind the great demand. But there aren’t enough houses and condominiums in the Valley to satisfy it. The result is higher and higher prices.
No Slowdown in Sales
But high prices did not slow down sales. The 1,920 houses and condominiums sold in June were the highest monthly total since June, 1979, when 1,959 residences were sold. In May, 1,822 residences were sold.
The typical house is sold in 79 days, according to board statistics. “They are selling faster now than normal,” said Jim Link, the board’s executive vice president.
Condominiums in the median price range typically stay on the market for 95 days before being bought, the board said. Link said that figure also is well below average.
Temmy Walker, president of James R. Gary & Co. Ltd. East in Studio City, said some homeowners act like pirates.
“Avarice is setting in,” Walker said. “You can’t help fall into that when people are panting and knocking down your door with multiple offers. People are suddenly discovering their houses are sunken treasure.”
Some 1,525 houses were sold in June, up 8% from the 1,418 sold in May. But June’s 395 condominium sales fell below May’s record of 404 sales.
Fewer Homes on Market
There were 5,198 single-family houses on the market in June, which is considered low. Condos were equally sparse--1,746 were for sale. By comparison, three years ago, 6,694 houses and 1,827 condominiums were listed for sale.
Real estate agents say prices could again set records in July. Rising interest rates could inspire prospective homeowners who have been taking a wait-and-see attitude to buy, agents said.
On Thursday, many of the nation’s biggest banks raised their prime lending rates to 9.5% from 9%. It was the second increase in the prime rate since February.
“If people think rates are going to go higher, then July could be even better than June,” Sands said.
“The leading conversation at cocktail parties is housing. Suddenly, it’s fashionable again,” he said.
The Valley realty board, California’s largest, reports sales by its members in the area from North Hollywood to Agoura. Its statistics do not include homes sold by their owners or most new residences.
JUNE VALLEY HOUSE SALES NORTH WEST Avg. Price: $2353,000 Sales: 96 NORTH CENTRAL Avg. Price: $247,300 Sales: 236 NORTH EAST Avg. Price: $143,000 Sales: 241 SOUTH WEST Avg. Price: $288,200 Sales: 341 SOUTH CENTRAL Avg. Price: $286,100 Sales: 241 SOUTH EAST Avg. Price: $256,900 Sales: 370 MATT MOODY / Los Angeles Times
