Home Sales in State Fell 6.2% in 1991 : Real estate: But there are indications of an upswing in activity in recent weeks.
In a report that reflects the ravages of the recession on California, a state real estate group said Tuesday that sales of single-family homes fell 6.2% and condominium sales slumped 13.5% last year.
In a separate report, the National Assn. of Realtors said sales of existing homes were nearly flat nationwide in the fourth quarter. The report suggested that a recovery in the housing sector stalled at the end of the year.
Despite the bleak 1991 figures, some real estate officials said there is evidence in recent weeks that lower mortgage rates are luring more California home buyers. Those officials also hope that President Bush’s budget proposals will spur buying.
While mortgage rates fell much of last year, they could not overcome the impact of the recession. In California, single-family home sales declined to 424,120 in 1991 from 452,100 in 1990.
In the nation as a whole, sales declined slightly to 3.606 million housing units from 3.609 million in 1990. The national figures aren’t directly comparable because they include condominium sales.
“It’s not surprising that California home sales declined last year, given the sluggish overall economy and low consumer confidence throughout much of the year,” said California Assn. of Realtors President Chuck Lamb. He said cutbacks in state government spending and layoffs in the important aerospace industry have been “particularly damaging factors in our real estate market.”
In addition to cautious house hunters, experts said another reason for sluggish home sales is that a huge mortgage refinancing backlog has delayed many closings.
Nationwide, about 1.5 million homeowners refinanced an estimated $160 billion in mortgage debt, more than double the $72 billion of 1990. The refinancing boom has created a huge backlog at banks, thrifts and other mortgage lenders that is expected to push many home sales that would have closed in January into this month or even March.
In recent weeks, however, some California real estate firms have reported an increase in people looking for homes. The California Assn. of Realtors reported that more homes are now listed for sale and the average time that a home is listed before being sold is dropping.
“I’m very encouraged,” said Chandler B. Barton, chairman and chief executive of Coldwell Banker Residential Realty in Mission Viejo. “The market is picking up fairly steady across the state.”
Ironically, many real estate agents said it wasn’t until interest rates began rising in mid-January that house hunters became serious. They struck deals out of fear that interest rates were bottoming out.
“Our first 2 1/2 weeks of January were not appreciably better than last year,” said Jon A. Douglas, president and chief executive of his own Beverly Hills-based real estate firm. “Then in about mid-January the rates went up about 75 basis points ( 3/4 of a percentage point), and buyers thought it was time to step up and take advantage of rates.”
As a result, Douglas said, January sales at his firm are expected to rise 17% over last January’s depressed levels.
Prices also have increased statewide. The California Assn. of Realtors said the median price of an existing single-family house rose 3.6% to $200,380 in California. Los Angeles prices rose 1.3% to $214,940, but Orange County prices declined 1.1% to $239,680.
Real estate experts said it is too early to determine if President Bush’s recently announced home-buyer financial aid proposals will boost the market.
That’s because even the most recent statistics reflect housing deals struck weeks before the President asked Congress on Jan. 28 to pass a $5,000 tax credit for first-time home buyers and permit penalty-free individual retirement account withdrawals of up to $20,000 for a down payment.
But in the five-county area of Southern California, January home sales continued the downward trend. Sales declined to 7,158 homes from the 7,345 posted last year, when concern about looming hostilities in the Persian Gulf virtually halted home buying, according to John Karevoll of Dataquick Information Systems, a La Jolla-based publisher.
Most Expensive Housing in U.S.
The median price of existing homes sold in the fourth quarter was up 4.7%, according to a real estate trade group. The median, the midpoint of prices for all homes sold, is considered the best gauge of price trends, says the National Assn. of Realtors.
Metropolitan Median Change from area price year earlier Honolulu $335,000 -8.1% San Francisco $252,000 +1.7% Anaheim $237,300 +2.2% Los Angeles $209,900 +1.1% Bergen County, N.J. $186,400 +4.5% San Diego $185,000 +3.2% Newark, N.J. $179,100 +0.3% New York City $170,800 +1.3% Boston $168,200 +1.5% Nassau County, N.Y. $157,700 +1.8%
Source: Reuters
