Southland Home Sales Fell Almost 9% in ’95

Home sales in Southern California fell nearly 9% in 1995, while prices fell more than 4%, a leading real estate research firm said Monday, underscoring the disappointment and frustration felt last year by one of the region’s most important industries.

However, the results were tempered by early signs that the residential market might finally be pulling out of its five-year tailspin. In fact, home sales in the Southland rose 1.1% in the final three months of the year, according to Dataquick Information Systems, a La Jolla-based real estate services firm.

“We are looking for a little light at the end of the tunnel,” said Los Angeles real estate broker Jon Douglas, whose sales volume was 15% lower last year than it was in 1994.

Economists and brokers began scaling back their 1995 forecasts almost as soon as the year began. Powerful winter storms kept buyers away, and a sharp jump in interest rates in 1994 continued to dampen demand well into in 1995. Interest rates fell later in the year and a growing state economy helped--but not as much as expected.

While a few bargain hunters took advantage of low home prices, the continued decline in the market kept most potential buyers on the sidelines. A total of 188,000 homes, both new and resale, were sold in Southern California last year, off from 206,000 in 1994.

Meanwhile, the median price of all homes sold in the six-county area fell to $160,000 at the end of 1995, off from $167,000 in 1994, Dataquick said. Prices of existing homes fell 5.3% to $161,000.

“The year started out really grim and [later] picked up some steam--but it didn’t pick up as much steam as some people had hoped for,” said John Karevoll, financial editor at Dataquick.

In Los Angeles County, home sales fell 5.4% in 1995 and the median price dropped 4.7% to $162,000. The median home price in Los Angeles County has plunged 16.4% since its peak year of 1990, when it reached $194,000.

Despite some late-year improvement, concern over the Orange County bankruptcy contributed to a 15.3% drop in home sales there. The median home price also fell 4.5% from the previous year to $193,000.

Mission Viejo agent Joan Wilson saw some promising signs, including in the sale of homes priced above $350,000 and in sales to executives moving into the area. But for the most part, Wilson’s business continued to depend on chasing after first-time buyers in a market with ever lower prices.

“You didn’t want to believe that the prices could drop any more--and they did,” Wilson said.

While sales and prices were down regionwide, there were some pockets of strength, including such pricey Westside markets as Brentwood and Bel-Air, which have seen prices tumble dramatically since the boom years of the late 1980s. In Brentwood, for example, the median sales price rose 5.2% to $662,000 near the end of 1995, compared with year-ago levels.

The demand for Westside mansions, fired by an economic boom in the entertainment business, has been strong enough for broker Fred Sands to advertise in search of homeowners willing to sell their estates.

“We have so many high-profile buyers that can’t find what they want,” Sands said of homes priced at $1 million and up. “There is a dearth of good properties out there.”

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Still Slipping

Median home sale prices in Southern California* fell again last year. Median price, in thousands:

1995: $160

*Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties

Source: Dataquick Information Systems