The local housing market had its busiest April in five years. But in terms of prices, it was the worst April in seven years--as prices for single-family houses plunged to 1987 levels.
Spurred by bargains and still-low interest rates, 987 single-family houses changed hands in April, up 30% from 762 houses sold in April of last year, according to the San Fernando Valley Assn. of Realtors.
Single-family house sales in April continued a yearlong trend of rising activity, and were up 44% from the 684 houses sold in March.
But the pickup exacted a heavy cost to sellers, as the average price of a single-family house sold last month was $219,700, down 16%, from $260,000 in April, 1993. The realty board said that was the lowest monthly average since April, 1987.
Similarly, the median price last month of a single-family house was $179,000, down 12% from $204,000 in April, 1993. The median price is the point at which half of the houses sold for more than the figure and half sold for less than that.
One reason for the steep drop in prices is that foreclosures in the Valley remain high. Properties repossessed by banks are often dumped at fire-sale prices. The average price is also dropping because houses with minor structural damage from the Northridge earthquake are being sold "as is" at a big discount, said Jim Link, the realty board's executive vice president.
In April, sales of condominiums, however, failed to keep pace with single-family houses. Condo sales totaled 128 last month, up 39% from 92 in March but down 17% from 155 in April, 1993. Besides being cannibalized by strong house sales, condo activity has slowed even more after the earthquake, brokers say, because many condos were toppled by the 6.8-magnitude temblor.
The average price of a condo sold last month was $132,400, a 9% drop from $144,900 in April, 1993. The median price fell 12% in April, to $115,000 from $130,000 a year earlier.
"It is still very much a buyers' market," Link said, "but buyers will lose the upper hand as active listings fall."
Active listings of houses and condos, already at their lowest in many months, plummeted 36% in April, to 6,280 properties from 9,794 in April, 1993. The inventory of houses for sale usually rises as summer approaches, but surprisingly, last month's listings were down 4% from March listings of 6,533.
Clearly, the nose dive in prices has discouraged some homeowners from putting their houses on the market.
Real estate executives were not encouraging. "Sellers must realize that this is where the market will remain for sometime," said Link, although he added that he expected prices to stabilize and perhaps even to rise slightly soon.
Link and real estate brokers say they expect the pickup in activity to continue through the summer. The realty board said that in April pending sales, or the number of escrows opened, stood at 1,097. That was up 27% from 862 a year earlier.
The Valley realty group, the largest in California, has 7,800 members from North Hollywood to Calabasas. Its figures generally do not include sales of new homes.