Southland Home Values Skid 5.2% : Resales: O.C. prices dive 5.7% in 12-month period, report shows, part of biggest seven-county drop in more than a decade.
The value of Southland homes, which showed signs of reviving a year ago, has dropped a steep 5.2% since then, according to a report issued this week by the Real Estate Research Council of Southern California.
The decline in home resale values in the seven-county region marks the sixth consecutive decrease. It also is the biggest 12-month drop in more than a decade, according to the council’s report on its April survey.
Values are falling faster than they have in the past three years, said Michael Carney, the council’s executive director. For the last six months of the survey period, values across the region plunged deeper--3.3%--than for the first six months.
In Orange County, home prices fell 5.7% for the 12-month period--3% for the latest six months--after inching up 0.5% for the annual period that ended with the council’s April, 1992, report.
“I think that what everybody is expecting is at least another year of declining values,” said Neil Olson, the council’s vice president. More encouraging, he said, are figures indicating that the number of foreclosures is abating.
Hardest hit in Orange County was the central area, where prices dropped 6.7%, in large part because of the deep decline in the value of homes in affluent areas like Newport Beach.
Across the Southland, the region hurt most was the Westside-Santa Monica area of Los Angeles County, where values plummeted 10.1% for the 12-month period.
Los Angeles and Santa Barbara counties topped Orange County’s declines by posting home values that were lower by 6.8% and 6.4%, respectively.
The council’s twice-a-year survey is based on drive-by appraisals of target homes and sale prices of comparable dwellings nearby. Some analysts criticize the group’s method as flawed, contending that the samples used are too small to be statistically significant.
But analysts agree that, whatever numbers are used, the small resurgence in both sales and prices that occurred a year ago has faded. Both the number of homes being sold and the prices paid have continued to drop since then.
In Orange County, for instance, the average resale price fell 4% to $240,599 for the first four months this year from $249,647 for the same period in 1992. The number of home resales also dropped, decreasing 14% to 6,643 from 7,750, according to TRW-Redi Property Data in Riverside.
“It was inevitable that the boom in the late 1980s had to taper off. It couldn’t be sustained,” said Nima Nattagh, a market analyst for TRW. “But we have reason to believe we’ve reached the bottom of the cycle. We’re not going to see bigger drastic drops, but that doesn’t necessarily mean values are going up.”
Downward Trend Continues
Home prices in Orange and the four surrounding counties dropped 5.3% in the 12-month period between April, 1992 and April, 193, the third straight year of declining prices. Los Angeles County led the fall.
Information is based on sample home appraisals, not actual sales.
Average home price, April, 1993:
Region: 1992-93 change
Regionwide: -5.3%; $234,010
Orange County: -5.7%; $231,449
Los Angeles County: -6.8%; $267,769
Riverside County: -3.8%; $156,597
San Bernardino County: -1.3%; $168,000
San Diego County: -4.4%; $223,904
* NO PART OF COUNTY ESCAPES
The latest measurement marks the largest countywide drop in average prices during the last five years. The central area had the largest dip, after registering the biggest increase in April, 1992
1989 1990 1991 1992 1993 Countywide 28.2% 5.0% -4.4% 0.5% -5.7% North County 31.1 4.5 -4.8 0.9 -5.1 Central County 20.5 5.6 -1.0 -2.4 -6.7 South County/beach cities 31.8 4.8 -6.0 0.6 -5.7
Note: Geographic areas include: North County: Anaheim, Buena Park, Fullerton, La Habra, Placentia, Yorba Linda Central County: Fountain Valley, Garden Grove, Orange, Santa Ana, Tustin, Westminster South County/beach cities: Costa Mesa, Huntington Beach, Irvine, Laguna Niguel, Lake Forest, Mission Viejo, Newport Beach, San Clemente, San Juan Capistrano.
Source: Real Estate Research Council of Southern California.
