Housing Sales Remain Sluggish Despite Drop in Interest Rates : Real estate: January’s 2% decline from a year ago indicates that consumers remain hesitant about buying property.
Housing activity remained sluggish in the San Fernando Valley last month, with combined sales of existing single-family houses and condominiums slipping 2% from its lackluster level of a year ago when the Gulf War kept a lid on the market, figures released Monday by the Valley’s Board of Realtors show.
Although the war is long over and mortgage interest rates have fallen sharply over the past year--which makes housing more affordable to more people--the statistics indicate that consumers remain hesitant about buying property.
Sales of single-family houses alone, at 494 last month, inched up only 1% from January, 1991, and were down 22% from the 634 sold in December, the board said. Condominium sales, at 137 last month, were off 26% from December and down 11% from the 153 sold in January last year.
Their combined sales of 631 in January were down from 641 a year ago and were 23% lower than the 818 sold in December.
Some of the decline is no doubt related to seasonal factors since people typically don’t buy as many houses in January and February because of holidays and the weather. But the figures signal that the market has yet to get a major lift from the drop in mortgage rates, which for conventional fixed-rate, 30-year loans have dropped to the 8.5% to 9% range from 9% to 10% a year ago.
However, board President Lorrie Griffey said the lower rates “and a sense that the worst of the economic problems are behind us brought a lot of buyers back into the market” in January.
“If the activity we’ve seen in the first four weeks of the year is a valid indicator of things to come, I think we’re going to see robust activity,” she said. “It certainly won’t be boom times again, like 1988, but it will be better than last spring when the Gulf War and consumer uncertainty over the economy killed the local real estate market.”
Housing prices, meanwhile, held steady. The average resale price of a single-family house last month was $298,300, up 14% from $262,100 in December and nearly unchanged from $297,300 a year ago.
The median single-family house price in January was $225,000, up 4% from the previous month and nearly unchanged from a year ago. The median means half the houses sold for more than $225,000, and half sold for less.
The average resale price of a condominium last month was $155,200, up 1% from December and an increase of 4% from January, 1991, the board said.
The Valley realty board, California’s largest, reports housing sales by its 8,000 members in the area from Agoura to North Hollywood. Its statistics do not include sales of most new residences.
January Valley House Sales North West: Avg. Price: $493,600 Sales: 19 North Central: Avg. Price: $299,000 Sales: 66 North East: Avg. Price: $182,600 Sales: 87 South West: Avg. Price: $320,600 Sales: 155 South Central: Avg. Price: $347,600 Sales: 67 South East: Avg. Price: $293,800 Sales: 100
