Bright Spots : Some Areas Showing Signs of Recovery After Four-Year Slump in Home Prices
Is the Southland housing market starting to warm up after its four-year “Big Chill”? Maybe. Just maybe.
It’s too early to break out the bubbly--the trend of Southland home prices is still down, but more gently--however, there are some encouraging bright spots.
Recent statistics from both the resale and new home markets suggest that the residential real estate slump is ending in scores of Southern California communities, according to housing industry experts.
On the resale side, which accounts for about 75% of home sales in Southern California, numerous neighborhoods have posted rising home prices and sales volume in the past few months, according to Dataquick Information Systems, which analyzes government records of completed transactions. (See chart accompany this story.)
In the new home market, the Southland’s 50 best-selling projects (out of 1,600 tracts) sold an average of almost four houses a week in the third quarter of 1993, according to the Meyers Group, real estate consultants. That’s almost 10 times as many as the average project sold.
And the best-selling communities were spread across the Southland, with 17 in Orange County, 10 in San Diego, 8 in Los Angeles and Riverside, 6 in San Bernardino and 1 in Ventura.
Here are overviews of the bright spots in the resale and new home markets, based on interviews with the experts who compile and analyze housing statistics. The best-seller lists are not meant to be all-inclusive; they reflect, however, some glimmers of light at the end of a long tunnel.
Resale Home Market
The top-selling resale communities represent a variety of home categories and locations, said Dataquick President Michael Ela. “We have entry-level homes and high-end homes, urban and suburban homes, primary residences and second homes,” he said.
“Watching the market take off five years ago it was clear that individual communities were affected differently,” Ela said. “It’s clear now that the recovery will take effect in individual markets at different times, and that it has already started in some.”
While the number of homes being sold the past few months has gone up compared to sales levels a year ago, prices for Southern California are still going down and are expected to do so at least through this spring, experts believe. But the overall trend tends to hide the sales and price characteristics that are unique to each local market.
“Every community has its own personality, its own statistical ups and downs,” Ela said. “Home prices peaked in 1989 in some communities, while in others they peaked in 1992. In other areas, prices stayed stable and never really had that run-up we saw five years ago or the following decline.”
Here are brief price-trend descriptions of some of the communities with both price and sales increases compared to a year ago. The numbers are median prices for single-family resale homes only. Condos are not included.
Los Angeles County
El Monte: Prices hit a median high of $165,000 in late 1989 and briefly again in 1991 and then slid down to a low of $150,000 in early 1992. The median has since crept up to a current $156,000 and is holding steady.
Glendora: Very solid. Never really had the spectacular price run-up that other areas had. Prices topped out at around $220,000 in early 1990, slid down to $205,000 in 1992 and have since inched their way up to $210,000.
La Canada Flintridge: Homes in all high-end Los Angeles County areas have been hit very hard. La Canada Flintridge has weathered the storm relatively well. Prices peaked in the high $500,000s in 1990, declined until early 1993 when it hit $435,000 and is up now to around $450,000.
Maywood: Very stable. Median has stayed in the $145,000-$155,000 range since 1989. Right now it’s $152,000.
Sierra Madre: Prices wobbled quite a bit here and briefly hit $400,000 in early 1990. They dove down to about $275,000 in early 1991 and have steadily crept up since, the median now is $310,000.
Orange County
Corona del Mar: As high-end areas go, this community is fairly stable. Prices hit their high in mid-1991 at about $750,000 and declined steadily until early 1993 when they bottomed out at $580,000. Right now prices have come back up to the low $600,000s.
Dana Point: It appears that many of Orange County’s move-up areas have bottomed out, Dana Point is one of them. The median peaked at $380,000 in late 1989, bottomed out at $275,000 last year, has now settled in at about $300,000.
Laguna Niguel: There was a furious run-up in prices here in 1988-89. The median hit $340,000 in mid-1990, slid down to $275,000 in early 1992, is now back up to $285,000 or so. Prices appear stable right now, but Laguna Niguel can be very jumpy.
Los Alamitos: Prices bounced up and down in 1989 and 1990, reaching a peak in mid-1990 of $340,000 when they started going down. Since early 1991 prices have stayed steady at just over $300,000.
Newport Beach: Another pricey area. Prices shot up and hit the top of the curve in early 1990 at $525,000. There was a slow slide until mid-1992 when the median bottomed out at $430,000. Prices are currently steady in the high $460,000s.
San Juan Capistrano: There have been some extreme fluctuations in the market here, perhaps as a result of shifts in the types of homes being sold. The run-up in prices topped out in late 1989 at $340,000, then dove down to the low $200,000s in mid-1991. The median has steadily increased since, to $240,000 today.
Seal Beach: There was a brief high point here in May, 1990, when the median brushed $380,000. It settled back down to $320,000-$330,000 where it has remained since except for a brief dip down to $310,000 in late 1992.
Riverside County
Cathedral City: From mid-1989 through the end of 1992 this city in the low desert had a steady median about $120,000. For a brief period a year ago prices dropped steeply, then came back and are now around $120,000 and climbing.
Rancho California: Back in 1989 people camped out to get a place in line to buy newly built houses in this community along Interstate 15 in Riverside County. Prices skyrocketed. They also plummeted when the slowdown hit, going from the $180,000s down to the $150,000s, where they’ve stayed stable for two years.
San Bernardino County
Alta Loma: While everywhere else was going up in late 1989, prices in this foothill community west of Claremont went from the $180,000s down to the $150,000s. With some fluctuations, it has gained ground since to the $160,000s where prices have stayed.
Big Bear: This is a second-home mountain community with a lot of cabins. Homes were going for about $110,000 in 1989 and they have stayed at that level since. Big Bear never had the run-up in prices, never had the decline.
Helendale: This community between Victorville and Barstow had a brief peak in late 1991 at $135,000 when some relatively expensive homes were sold. Otherwise prices now are what they have been pretty much for the last four years, right around $125,000.
Loma Linda: Prices peaked in late 1990 at about $190,000 when a lot of newly built houses were being sold. When that market dried up, prices went down and bottomed out two years ago at $125,000. They’ve been going steadily up since and are now at $160,000.
Redlands: Prices have been very stable. There was a slight surge to $160,000 in early 1992, otherwise prices have held steady at about $150,000 since late 1989.
Wrightwood: This mountain community had a price surge up to $160,000 in early 1992. Prices went down, then up again and have stabilized at about $150,000.
San Diego County
Coronado: This pricey San Diego community has not had the fluctuations that other high-end Southland areas have had. Prices went up to about $430,000 during early 1989, dipped down to $390,000 later that year and have been stable at around $400,000 since then.
Escondido: From mid-1989 through mid-1992 the median stayed stable at $165,000 to $170,000. Prices slid down to the $155,000 to $160,000 range later that year, and are up to the $175,000 range now.
Poway: From the summer of 1989 through the summer of 1992, prices in Poway stayed about $230,000. The median dipped down below $200,000 briefly in early 1993, then bounced back up again to $230,000.
New Home Market
Of 1,608 active developments in Southern California, the top-seller in the third quarter of 1993 was Del Webb Corp.’s Sun City Palm Springs. The senior-restricted project has been open since February, 1992, and has sold 511 homes for an overall weekly average of almost five sales, the Meyers Group said.
The desert project draws retirement-home buyers from throughout the United States, but 80% are from Southern California. Prices range from $98,500 to $238,500. Premiums for golf course lots range from $40,000 to $90,000.
The sales rate at Sun City Palm Springs, which led the bestsellers list for the first three quarters of 1993, is “staggering,” said Jeffery S. Meyers, president of the Meyers Group.
No. 2 on the list was Inco Homes’ Spirit project in Murrieta, where builder Ira Norris is offering homes as large as 3,000 square feet for about $168,000.
“New home buyers want more for less,” Meyers said. “They aren’t necessarily looking for the lowest price. They want the best value. At Spirit, you can get a big home for about $60 a square foot. That’s a terrific value. And if buyers are going to make a long commute, they want value.”
No. 3 was the best-selling condo project in Southern California, the affordable, high-density Vineyards by John Laing Homes in Orange County’s Foothill Ranch. “First-time buyers see this as a ‘get-me-in’ project,” Meyers said.
The No. 4 and No. 5 top sellers were single-family projects by Kaufman & Broad Home Corp., the state’s largest home builder and the developer of 13 of the top 50 best-selling projects.
K&B;’s California Summit tract in Canyon Country, No. 4 on the list, is an example of home buyers’ desire for a safe neighborhood, Meyers said.
“People want a lower crime rate than where they moved from, and Santa Clarita (which includes Canyon Country) was recently named one of the safest cities in America,” he said.
The average price for homes at the 50 top projects is about $170,000 for 1,650 square feet. “This is very affordable to most first-time and first move-up buyers,” Meyers said. “It’s cheaper than renting, which some home builders are even advertising.”
Few builders these days are offering incentives, such as decorating and landscaping allowances, but many are paying buyers’ closing costs of $3,000 to $5,000, Meyers said.
Best-Selling Southland Projects
Project County Type Community 1. Sun City P.S. Riverside Det. Palm Springs 2. Spirit Riverside Det. Murrieta 3. Vineyards Orange Att. Foothill Ranch 4. Calif. Summit L.A. Det. Canyon Cntry 5. Calif. Palms Riverside Det. Indio 6. Mesa Cove San Diego Det. Mira Mesa 7. Calif. Reflectns Riverside Det. Temecula 8. Calif. Encore Riverside Det. Temecula 9.* Vista Del Mar Orange Att. Huntington Bch 10. Calif. Ridge Orange Det. Trabuco Cnyn 11. Villa Martinique San Diego Att. Tierrasanta 12. Horizons Riverside Det. Temecula 13. Calif. Hillcrest S. Brnrdno Det. Chino Hills 14. Barcelona Orange Det. Tustin 15. Pierhouse Orange Att. Huntington Bch 16. Paloma Ventura Det. Ventura 17. Glen Arbor San Diego Det. San Marcos 18. Greystone Ter. San Diego Det. Rncho Pnsquito 19. Calif. Parke Orange Det. Foothill Ranch 20. Greystone Hts San Diego Det. Rncho Pnsquito 21. Rncho Vera Cruz Orange Att. Tustin 22.* Montego Riverside Det. Moreno Valley 23.* Excelsior Ests L.A. Att. Norwalk 24. Calif. Foothills I L.A. Det. Palmdale 25. New Beginnings Riverside Det. Temecula
Project Developer Sold Qtly 1. Sun City P.S. Del Webb Corp. 61 2. Spirit Inco Homes 56 3. Vineyards John Laing Hms 56 4. Calif. Summit Kaufman & Broad 53 5. Calif. Palms Kaufman & Broad 47 6. Mesa Cove Pardee Cnst. 46 7. Calif. Reflectns Kaufman & Broad 46 8. Calif. Encore Kaufman & Broad 46 9.* Vista Del Mar Southridge Hms 42 10. Calif. Ridge Kaufman & Broad 41 11. Villa Martinique Martinique Hldg 40 12. Horizons Terra Nova Cnst. 40 13. Calif. Hillcrest Kaufman & Broad 35 14. Barcelona Fieldstone Co. 34 15. Pierhouse Mola Dvlpmnt 32 16. Paloma Wittenberg-Liv. 32 17. Glen Arbor Presley Homes 32 18. Greystone Ter. Greystone Hms 30 19. Calif. Parke Kaufman & Broad 30 20. Greystone Hts Greystone Hms 29 21. Rncho Vera Cruz Irvine Pacific 29 22.* Montego Woodview Dev. 29 23.* Excelsior Ests Excelsior Invest 28 24. Calif. Foothills I Kaufman & Broad 28 25. New Beginnings Forecast Corp. 28
* Denotes auction projects.
Bright Spots in Resale Housing
Southland communities where both prices and sales are increasing.
Number One-year Median Pct. sold Increase price Chng. 9/93- in No. $1,000s 9/92- 11/93 Sold 11/92 Los Angeles County Castaic 28 21.7% $179 6.3% Chatsworth 69 11.3% $241 5.9% Commerce 64 4.9% $149 2.0% El Monte 104 31.6% $156 1.3% Glendora 129 13.2% $210 8.0% La Canada Flintridge 79 41.1% $448 9.4% Maywood 14 100.0% $152 4.7% Sierra Madre 27 17.4% $310 33.8% Orange County Corona del Mar 31 34.8% $641 4.1% Dana Point 58 7.4% $301 7.1% Irvine 247 18.2% $267 0.3% Laguna Niguel 174 22.5% $285 0.9% Los Alamitos 54 50.0% $304 0.9% Newport Beach 138 55.1% $467 6.0% San Juan Capistrano 239 85.3% $238 6.5% Seal Beach 29 20.8% $325 1.4% Tustin 97 64.4% $203 3.7% Riverside County Cathedral City 81 26.6% $120 0.8% Glen Avon/Pedley 117 18.2% $126 4.3% Hemet 177 16.4% $106 4.4% Sun City 186 37.8% $137 7.1% San Bernardino County Alta Loma 123 6.0% $162 2.3% Big Bear Lake 97 83.0% $115 7.5% Helendale 22 4.8% $128 8.1% Loma Linda 28 33.3% $159 49.5% Redlands 180 19.2% $150 4.8% Sugarloaf 30 328.6% $93 9.7% Wrightwood 19 280.0% $150 5.9% San Diego County Bonita 60 81.8% $266 1.5% Coronado 32 10.3% $396 3.8% Escondido 356 30.4% $175 4.4% Lakeside 86 62.3% $177 10.6% Lemon Grove 54 12.5% $136 0.4% Poway 158 1.3% $229 6.8% Ventura County Oxnard 204 2.0% $172 1.0%
