Home Sales Down From Year Ago : Real Estate: TRW report shows San Diego County sales down from 1989, with concerns over inflation and a possible Mideast conflict blamed.

Home sales in San Diego County rose slightly during the past month but were down significantly when compared to last August, according to Anaheim-based TRW Real Estate Information Services.

Throughout Southern California, August sales were slightly above levels reported during a “lackluster” July, according to TRW. However, regional totals were significantly below last year’s levels. Sales were “especially dismal” in San Diego County, said Ed Setzer, vice president of TRW’s Real Estate Information Services division.

Residential sales rose to 3,412 in August, up from 3,028 in July, Setzer said. But sales were off by 25% when compared to August, 1989, when 4,528 countywide sales were reported.

The plunge further illustrates how soft San Diego’s real estate market has grown, industry observers said, because August sales typically benefit from home buyers who are rushing to complete deals before the school year begins.

Last month, the inventory of new housing in San Diego reached the highest level in four years. During August, the San Diego Board of Realtors released figures that showed the resale market for existing homes and condos to be unusually flat.

That flat market also is apparent in the number of authorized building permits countywide, which is “running at a pace that’s going to be a little bit down from last year’s 18,813,” said Max Schetter, senior vice president of the Greater San Diego Chamber of Commerce. Last year’s total permits was well below the average of 24,000 that was reported during the past 10 years, Schetter said.

Housing sales in San Diego County, the nation’s least-affordable housing market, are being buffeted by concerns about inflation, high interest rates and the possibility of hostilities in Iraq.

“People are afraid,” said Russell Valone, president of Market Profiles, a San Diego-based housing market research firm. “Nothing has happened yet (in the Middle East) but it’s already having an impact on our market here.”

Because of those economic and geopolitical forces, San Diego has evolved “more into a market where if you really want to sell, or have to sell, you’ve got to be realistic,” said Marjorie McLaughlin, president of the San Diego Board of Realtors, which represents brokers in San Diego, Chula Vista, La Mesa and El Cajon. “Some houses are still coming on the market way high . . . but (owners) are taking substantially less prices when they sell.”

While Market Profiles has not yet completed work on its third-quarter sales report, based upon the first half of 1990, “you’re going to see numbers that are down,” Valone said. “They’ll be down significantly.”

While TRW’s numbers suggest a dramatic downturn from a year ago, the Realtors’ monthly figures indicate that sales were down only about 1% from August, 1989, McLaughlin said. The two reports differ, however, because TRW collects its data from around the county while Realtors’ members are involved in only about half of the county’s sales of houses and condos.

McLaughlin said that homes in the lower and mid-priced ranges continue to move while those with higher price tags are very slow to move. “It’s definitely taking longer to sell” homes that are offered at $500,000 or more, McLaughlin said.

“During much of this year, there have been two added incentives for purchasing a new home,” Setzer said. “Price appreciation has slowed or stopped, and record numbers of homes have been listed for sale.”