Existing Home Sales Fall 4th Straight Year : Real estate: While the market may have bottomed out, Valley realtors aren’t expecting a dramatic turnaround in 1993.
Local realtors confirmed Monday that the area’s housing market remained in the doldrums last year, saying resales of Valley houses and condominiums dropped 13% in 1992 for their fourth straight annual decline.
The sale of 9,805 single-family detached houses and condos also marked the first time in a decade that less than 10,000 units changed hands in the Valley, according to figures released by the San Fernando Valley Board of Realtors.
Last year’s sales also were less than half the 19,964 existing properties that were sold in 1979, the area’s record year.
Ironically, the market’s weak performance in 1992 ended on a positive note. Resales of houses and condominiums in December alone edged up 3% from a year earlier, the board reported. The December gains followed modest year-to-year increases of 2% and 3% in November and October, respectively.
Lon A. Adams, the board’s new president for 1993 and a Woodland Hills broker, said he’s hopeful that the market won’t get any worse during this year, in part because of improving consumer sentiment about the economy. “With that having turned to a degree, we’re hoping we’re not headed south any longer,” he said in an interview.
But at the same time, he added, “I don’t think anybody is looking for any dramatic gains. It will probably be a similar year to this past year, maybe with slight to moderate growth.”
The local housing market has been under pressure in recent years because of the weak economy generally and the economic troubles in California in particular.
The slowdown in Pentagon spending has resulted in widespread job losses in the region’s aerospace and defense industries. Employers’ efforts to contain costs in the face of rising workers’ compensation and health-care expenses also are keeping a lid on job growth and salary gains in the area.
Those factors have dampened housing sales despite a drop in interest costs that have kept fixed rates on conventional, 30-year mortgages to well below 10% for some time. And the slump in sales has all but eliminated the rapid appreciation in housing values that local homeowners came to expect during the mid-1980s.
In reviewing 1992, Adams said he found one silver lining: Last year’s sales were 49% above the meager 6,598 properties sold in 1982 when a major recession was taking hold nationwide and mortgage rates were in double digits.
But there was no mistaking the local market’s problems last year. In 1992, 7,774 single-family houses were resold, down 10% from 8,585 the prior year, and condominium sales tumbled 17%, to 2,199 from 2,646.
In addition, the current inventory of listed but still-unsold properties in the Valley totals 11,401, a supply that would take more than a year to sell at December’s sales pace.
The average resale price of a single-family house last year was $283,386, down 3% from $291,717 in 1991, but down only 4% from the average price of $295,125 set three years ago. That slow descent reflects many sellers’ resistance to dropping their asking prices, a resistance that’s been wearing down as sellers see their properties go begging.
“A lot of sellers have realized that in this marketplace, they have to be extremely realistic in terms of their prices,” Adams said.
Nonetheless, the average resale price of Valley condominiums last year dipped only 1%, to $152,212 from $153,208 the prior year, the board’s figures show. And unlike single-family houses, the average condo price was up 5% from the $144,452 average three years ago.
In December alone, 713 single-family houses were sold, up from 634 a year earlier and up 12% from the 637 sold in November, 1992, the board reported. Condo sales in December totaled 128, down 30% from 184 a year earlier and down 5% from the 135 units sold in November.
Realtors attribute much of the drop in condo sales to first-time buyers being able to afford single-family detached housing, thanks to the relatively low mortgage rates and stable prices.
The Valley realty board, the largest in California, reports housing sales by its 7,900 members in the area from North Hollywood to Calabasas. Its figures do not include sales of most new residences.
December Valley House Sales
Avg. Price: Sales: NORTH WEST $295,200 27 SOUTH WEST $287,000 227 NORTH CENTRAL $270,100 107 SOUTH CENTRAL $297,000 82 NORTH EAST $162,800 101 SOUTH EAST $303,200 169
Annual Valley Housing Sales
Single-family houses Condominiums Year Properties sold Average price Properties sold Average price 1992 7,774 $283,386 2,199 $152,212 1991 8,585 $291,717 2,646 $153,208 1988 15,263 $248,492 4,510 $127,017
Source: San Fernando Valley Board of Realtors
