Sales of houses and condominiums fell sharply in February, mostly because of an increase in mortgage interest rates, the San Fernando Valley Board of Realtors reported Monday.
There were 902 single-family houses sold in the Valley in February, a 15% decline from the 1,057 houses sold in January. The average price of a house inched up about 3% to $270,400 from $263,600 in January but was still lower than the record price $280,200 set in December.
“There was certainly some reaction to higher interest rates,” said Temmy Walker, president of James R. Gary & Co. Ltd. East in Studio City.
Condominium sales also dropped. There were 302 sales in February, compared to 349 in January. The average price of a condominium fell slightly to $132,700 in February, compared to $133,100 in January.
Real estate agents say the residential market’s poor showing in February may be a precursor to an overall slowdown. “The numbers and trends are a little unclear at this point,” said Buddy Bernard, the board’s president. “Recent increases in mortgage interest rates eventually must temper what has been a fast-paced and torrid residential resale market.”
The condominium and low-end housing markets already are suffering because of high rates, according to some agents. “Because of an increase in interest rates, I think we’re seeing a softening in prices and sales of condominiums and less expensive houses,” said Richard Mathies, regional vice president of Fred Sands Realtors.
However, despite a recent slump, the results from the first two months of 1989 are still better than the comparable period in 1988. For example, only 840 houses sold in February, 1988, about 7% less than last month. The average price of a house in February, 1988 was $219,800.
“You have to keep your eye on the big picture,” Walker said. “This February was better than last February, and this January was better than last January.”
The number of people putting their residences on the market continues to increase. There were 5,626 houses for sale in February, up 8% from January. Some 1,232 condominiums were available for purchase in February, compared to 1,097 in January.
The Valley realty board, California’s largest, reports sales of houses and condominiums by its members in the area from North Hollywood to Agoura. Its statistics do not include most new residences, which generally are not sold by real estate agents, or sales by homeowners who do not employ agents.
FEBRUARY SAN FERNANDO VALLEY HOUSE SALES
NORTH WEST Avg. Price: $267,800 Sales: 44
NORTH CENTRAL Avg. Price: $292,200 Sales: 138
NORTH EAST Avg. Price: $159,000 Sales: 167
SOUTH WEST Avg. Price: $316,568 Sales: 209
SOUTH CENTRAL Avg. Price: $295,900 Sales: 131
SOUTH EAST Avg. Price: $283,300 Sales: 213