San Fernando Valley Home Sales, Prices Rise
Sales of single-family homes in the San Fernando Valley jumped 26% in September over a year ago, while average selling prices rose 9%, reflecting the most active market in eight years.
Last month, 1,084 single-family homes closed escrow, compared with 859 a year earlier, according to the Southland Regional Assn. of Realtors, which encompasses the San Fernando and Santa Clarita Valleys.
September was also the fifth consecutive month that local home sales topped 1,000 units, a benchmark last reached in 1989.
“After an extremely long dry spell, we can finally say with certainty that the San Fernando Valley real estate market is back,” said Mel Wilson, president of the association.
“Resale prices may never return to the level of the late 1980s, but sales most certainly are headed in that direction.”
Last month, the average Valley home sold for $227,500, up 9% over the $208,300 average in September 1996.
At the same time, the median home price increased 7.6% in September to $169,000, compared with $157,000 a year ago. The median price means that half the homes sold for more than $169,000 and half sold for less.
Meanwhile, pending sales - a measure of future activity - showed a 68% increase over 1996 figures, to 1,297 houses in escrow from 771 a year earlier.
Although the market tends to cool with the coming of autumn and the beginning of the school year, the number of open escrows clearly indicates that the market will be unseasonably hot for months to come, Wilson said.
The Valley’s economic rebound, centered around the entertainment, manufacturing and computer technology industries, has drawn a large new work force to the area that has bolstered home sales.
Additionally, interest rates for 30-year fixed-rate mortgages, the standard home loan, continue to hover a little over 7%, according to Freddie Mac, the Federal Home Loan Mortgage Corp.
The only problem seems to be a shrinking inventory.
The number of homes on the market in September dipped 13% to 4,818 listings from 5,548 a year earlier.
“If inventory remains short and the market follows the traditional laws of supply and demand, the pendulum, which currently only slighly favors buyers, could swing to favor sellers,” said Wilson. “That’s not to say prices will rise dramatically at any time in the near future, but clearly the market is in transition.”
Today, homes that foreclosed during the state recession of the early 90s are reselling at prices far below their original worth, dragging down market values.
“This is the only factor not causing prices to rise,” said Wilson, who predicted that the number of bank-owned properties would dwindle in six months and that prices would rebound.
“The market does not appear to be slowing down,” said Jim Link, executive vice president of the realtors’ group. “While bank-owned properties will continue to influence prices for many months to come, the years-long buyers’ market may soon come to an end, especially if the inventory of homes for sale remains at the current low levels.”
Homes priced under $200,000 continue to constitute the most active segment of the market, and in September accounted for 60% of all sales.
Meanwhile, the priciest properties in the Valley continue to be in the Calabasas and Woodland Hills areas, where the average single-family home sold for $269,000 last month.
But buyers with limited means can get more bang for their buck in other areas, Wilson said.
In the Northwestern communities of Northridge and Chatsworth, for example, available homes are bigger, newer and cheaper.
Sales in the condominium market also picked up last month, as did prices.
In September, 292 condos were sold, up 15% over the 253 sales a year earlier.
Last month, the average selling price for a condominium was $105,200, up 1% from $103,900 a year earlier. But the median condo sales price rose 19% to $95,000, from $80,000 in September 1996.
The Southland Regional Association of Realtors tracks housing sales that include those made by 5,800 brokers from North Hollywood to Calabasas.
