Home Sales in State Badly Trail Last Year’s; Prices Still Sagging

Despite a substantial drop in mortgage rates, the pace of California homes sales in June fell 17.4% below last year’s level and residential real estate prices continued to sag, the California Assn. of Realtors reported Tuesday.

The June results cap a disappointing first half for the state’s real estate industry, which has been hurt by a faltering economy, consumer uncertainty and poor weather.

“I think the performance year-to-date is much more dismal than we had previously expected,” said Chris Taylor, a real estate economist for Wells Fargo Bank.

Sales of existing single-family homes in June reached 413,630 on an annualized basis, according to the monthly report by the Los Angeles-based realtor group. While June sales were up 8.4% from May, the seasonally adjusted results were far below those reported in June of last year, when a rebounding market pushed the sales pace to 500,590 homes.

The median sales price in June fell 6.2% from last year to $177,580. The median price in June grew only 0.8% from a revised $176,180 reported in May.

Sales and prices in Southern California also trailed behind last year’s results. In Los Angeles County, for example, the median sales price fell 8.3% to $175,370. The Orange County median price fell 2% to $208,330.

Realtor association President Ed Albers took heart in the recent month-to-month sales gains for May and June--the first such back-to-back increases since early 1994. In addition, Albers said the market stands to benefit from lower interest rates.

After peaking at 9.19% last December, rates on a 30-year, fixed-rate mortgage fell to as low as 7.57% in June. Loan rates fell even further earlier this month before bouncing back up to 7.60% last week.

“I think we will see a slow increase throughout the balance of this year,” Albers said. “We need a better second half, and I see that coming.”

Many real estate agents in Southern California report that low rates and prices are attracting increasing numbers of potential buyers--but sales have still been hard to come by.

“There are definitely more people looking and more people are offering,” said David Raposa, broker and owner of City Living Realty in the Los Angeles’ historic West Adams District. But he added, “I don’t know if that has translated into more sales.”

In Whittier, Century 21 real estate agent Shane Braudo has sold seven homes--most priced below $200,000--since June. But he said the lower rates have played only a small role in swaying buyers. Instead, most have been attracted by mortgages with low down payments available to many first-time buyers.

“It really didn’t have the impact we thought it would have,” Braudo said of the mortgage rates. “The low down payment has been more of a factor in getting people in line to buy.”

Many sellers have been disappointed to discover that prices remain soft. In many neighborhoods throughout the area, larger numbers of bank foreclosure sales have dragged down prices, real estate agents say.

Dataquick Information Systems, a La Jolla-based real estate research firm, said foreclosed homes are selling for about 15.7% less than non-foreclosed homes. Last year, the discount was 12.2%

Pat Rollie, an agent who specializes in the Mt. Washington area of Los Angeles and Pasadena, said price remains the most important factor for home buyers.

“People are still looking at prices,” he said. “Nothing matters but price.

Nationwide, the sales in June fell 5.7% from the same month last year to an annualized rate of 4.01 million homes, according to the National Assn. of Realtors. However, June’s sales were up 6.5% over May’s.

* SMALL RAISES

Pay increases stay small. D2

* AMERICAN DREAM

Rate of home buying rises. D2

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Home Sale Prices

* Wondering what that house down the street sold for? Find out with the TimesLink on-line service. The sale prices of all home sales recorded in Los Angeles, Orange and Ventura counties in the past two weeks are available. Homes are listed by community and include year built, square footage and number of bedrooms and baths. Sign on and “jump” to keyword “home sales.”

For more information on TimesLink, call (800) 792-LINK.

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California Home Sales

Sales of existing single-family homes, seasonally adjusted annual rate, thousands of units:

Jan. 1994: 500.6

Jan. 1995: 413.6

Source: California Assn. of Realtors