Home prices continued to fall throughout the region this summer, but the number of houses sold is up markedly in La Canada Flintridge and is holding steady in Glendale and La Crescenta.
“The bad news for sellers is that prices are still declining in the marketplace,” said Barry Ross, president of the Glendale Board of Realtors. “However, it’s fair to say that, in general, sales are up and inventory is down.”
In La Canada Flintridge--one of the county’s few bright spots for home sales--the number of homes sold from May through July is up nearly 21% over the same period last year. The median sale price for that period dropped about 13% to $446,000 this year, compared to $512,000 last summer.
Sales statistics provided by Dataquick Information Systems show the number of single-family resale homes sold in Glendale and La Crescenta between May 1 and July 31 this year is down 1% compared to the same period last year. The median sale price of about $264,000 represents an 11% drop from last year.
Few real estate agents expect prices to rebound to 1989 levels, when the housing market peaked. Instead, a new “fair market value” is emerging that reflects the realities of Southern California’s widespread layoffs and ailing economy, agents say.
“This is the real world. What we saw with home prices in the late ‘80s was out of control . . . it was fantasy land,” said Ann McLaughlin, vice president of the Foothill Assn. of Realtors, which includes La Canada Flintridge and La Crescenta.
Real estate agents say prices have tumbled 25% to 30% in Glendale and La Canada Flintridge since 1989. And Ross and other local agents say there is no end in sight to the downward spiral in prices.
La Canada Flintridge’s substantial increase in home sales this summer compared to last summer is an aberration compared to the rest of the county. In most other communities, the number of homes sold and the median sale price this summer compared to last are down. In Los Angeles, for example, the number of homes sold between May 1 and July 31 this year compared to last is down 49%, while the median price of homes sold fell nearly 12%.
Foothill real estate agents offer an array of theories about why La Canada Flintridge sales are up, including the strong reputation of schools there, the small-town atmosphere, and the proximity to downtown Los Angeles.
As home prices dropped over the past three years, more people could afford to live in the exclusive community.
“As recently as three years ago you couldn’t find a home in La Canada Flintridge priced under $400,000, and this year we’re having sales for less than $250,000,” said Mike Sylvas, president of Keeler Dilbeck Realtors and a board member of the Foothill Assn. of Realtors.
But while sellers are beginning to face the realities of today’s housing market, some buyers are holding out for the deal of a lifetime.
Doug Lee LaLonde, a marketing executive whose 3,200-square-foot ranch-style home in La Canada Flintridge has been on the market three weeks, said his agent told him to expect offers of $100,000 less than his $795,000 asking price.
“I’ve heard the horror stories about homes staying on the market for two years,” said LaLonde, who is in a hurry to sell because he has been offered a promotion with his company that will force him to relocate.
Real estate agents say prospective home buyers are taking their time shopping.
“Buyers today are far more savvy about the market and what’s out there,” said McLaughlin, of the Realtors’ board. “They spend a whole lot more time making the decisions. They need to be taken out to see enough property so that they’re comfortable that they’re not paying too much.”
Five years ago, the inventory of houses on the market was so low and competition so fierce that buyers would not have time to look at more than half a dozen homes before making an offer on one.
Today, however, buyers are looking at 50 or more houses before narrowing their choices.
Jill Kaufman, a Pasadena resident who is trying to buy a home in the La Crescenta area, said she looked at about 50 homes before offering $275,000 for a three-bedroom, 1954 ranch-style home. The seller was asking $289,000, she said, and finally settled for $283,000. Kaufman said she made the offer the day the house went on the market.
Although Kaufman is trading up, many prospective home buyers in the Glendale area are entering the market for the first time, agents say. That helps explain why the homes most likely to sell quickly are priced below $200,000 in Glendale. There are relatively few first-time buyers in pricey La Canada Flintridge, but agents say sales of homes priced below $400,000 will move faster.
In Glendale, first-time buyers have helped keep the resale condominium market from sinking as low as that of detached homes. Between May 1 and July 31, 82 condominiums sold in the city--up 7.9% from the same period last year. The median sale price was down 5%. Numbers for La Canada Flintridge were not available.
Low interest rates are helping to draw first-time buyers into the market, and real estate agents believe rates are likely to stay low for the foreseeable future. But the real estate market as a whole is not expected to improve until late next year.
“We don’t expect to see much of an increase in interest rates because the economy seems to be slowing down nationally and California hasn’t shown growth in three years,” said Adrian Sanchez, regional economist for First Interstate Bancorp in Los Angeles. “What rates are today they are likely to be in the first half of 1994.”
But he said that as long as the job market is down, real estate values will continue to fall in lock-step. Sanchez does not expect home values to stabilize until the second half of next year.
He offers this advice to anyone trying to sell a home: “If you don’t have to sell right now, your best bet is to take the home off the market and wait for a recovery.”