House, Condo Sales Hit 5-Year High : Resales Increase 22% But Average House Prices Continue to Plunge, Down 9% Since ’93
Capping off a year of good news-bad news for the local housing market, sales of existing single-family houses and condominiums in the San Fernando Valley in 1994 rose to their highest level since 1989, but sale prices continued to plummet.
A total of 12,451 residential properties were resold in the Valley last year, up 19% from 10,506 in 1993 and the most sold since 1989, when 17,310 houses and condominiums changed hands.
Sales of single-family houses jumped to 10,860. That’s a 22% increase from the 8,899 units sold in 1993 and the highest level of resales since 12,753 single-family houses were sold in 1989. The San Fernando Valley Assn. of Realtors, which compiles the housing figures, trumpeted the 1994 results as good news for the local market.
“Not even the Northridge earthquake was able to slow the demand for housing that appeared as a result of the improving economy, favorable resale prices and very favorable interest rates, said Pat A. Zicarelli, president of the realtors group.
But the stronger sales last year came at a painful price to sellers. The average price of a single-family house sold in 1994 was $230,917, down 9% from the $252,633 average price of the previous year. It was the lowest average resale price since 1987’s $203,433 average price.
Since the average resale price for houses peaked in 1990 at $296,675, average house prices have plunged 22%.
And the median resale price of single-family houses last year was $178,417, meaning that half the houses sold for more than $178,417 and half sold for less. That was a 10% decline from 1993’s median house price of $198,117, and the lowest median price since $161,582 in 1987.
The single-family housing market finished the year on a high note, with December sales totaling 983, up 8% from both November and December, 1993, months when sales totaled 908 units each. The average sales price also picked up last month, to $225,100, a 2% gain from November’s $220,500 average price. But December’s average price was 9% below the $246,700 average price of a year earlier.
Housing prices were also hurt by a rising number of foreclosures in the areas most impacted by the Northridge earthquake a year ago. According to TRW REDI Property Data, a real estate information company, the number of residential and commercial foreclosures in the Northridge area jumped 23% to 5,225 in the first 11 months of 1994, compared to the 4,252 foreclosures in the same period a year before. In contrast, foreclosures in other areas of Los Angeles County rose 17% in the same time frame.
Condominium sales last year declined slightly, nearly halting their steep slide of the previous four years. Resales of condominiums totaled 1,591 in 1994, 1% below the 1,607 condominiums that changed hands in 1993. Since peaking in 1989 with a total of 4,571 condominium sales, that market has nose-dived 65%, which realtors blame largely on the growing affordability of single-family houses.
The average price of a condominium sold in 1994 was $119,975, 15% below the $140,800 average resale price the year before and down 22% from the market peak of $153,208 in 1991.
The median price of condominiums resold in 1994 was $114,800, down 14% from the $132,792 median price in 1993 and the lowest median price since $113,036 in 1987.
Condominium resales also finished the year on an uptick, with sales rising to 187 in the final month, up 31% from the 143 units sold in November and a 9% gain from the 172 condominiums sold in December, 1993.
But the average price of used condominiums sold in December was a dismal $104,700. That’s 1% below November’s average price of $105,300 and down 24% from the $137,700 average of a year earlier.
Jim Link, the realty association’s executive vice president, said the wild card now for the housing market is interest rates, which continued to rise through 1994. “Further increases will stifle the market,” he warned, “but if rates hold steady or decline, look for a continued slow, steady increase in sales and the beginning of moderate increases in resale prices.”
Link also noted that the housing market today is far different than in the late 1980s, when house and condominium owners trading up to bigger and more expensive properties drove the market. In 1994, he said, most of the resale activity was from first-time and moderate-income buyers who wanted to take advantage of falling prices.
In another sign that the local housing market might continue to show a gradual recovery, the number of houses listed for resale fell sharply in 1994, tightening the supply of available properties. A total of 25,406 houses and condominiums were listed in 1994, 21% below the 32,199 listings in 1993.
The Valley realty association, the largest in California, reports housing sales by its 7,200 members from North Hollywood to Calabasas. Its figures do not include sales of most new residences.
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San Fernando Valley Single-Family Home Sales
Average Properties Year price sold 1994 $230,917 10,860 1993 $252,633 8,899 1992 $283,386 7,774 1991 $291,717 8,585 1990 $296,675 8,726 1989 $295,125 12,753
Average Properties Year price sold 1994 $119,975 1,591 1993 $140,800 1,607 1992 $152,212 2,031 1991 $153,208 2,646 1990 $151,983 3,313 1989 $144,542 4,571
Source: San Fernando Valley Assn. of Realtors