June Boom Sees Valley Home Sales Go Through the Roof

Closing out half a year of sharp gains, the San Fernando Valley real estate market continued to sizzle in June, with single-family home sales rising 31.1% over a year ago and prices reaching their highest point in five years, according to figures released Monday.

Led by high-end properties in the southwest Valley, buyers closed escrow on 1,315 single-family homes in June, the highest total for any month since May 1989.

Signaling that consumers have both the confidence and the wherewithal to spend big, the median price for a single-family home in the Valley rose 26% to $208,000 in June, the highest level since 1993.

Median prices remain well below the high-water mark of $245,000 recorded most recently in November 1989, but have surged $39,000 in the first half of the year.

“I think this is the best [market] we’ve seen in eight or nine years,” said Jim Link, executive vice president of the Southland Regional Assn. of Realtors, which issues the monthly home sales report. “And all indications are that it’s going to continue at least into the summer and fall.”

Link predicted fairly brisk sales even into the late summer, when activity normally begins to slacken.

Given the potent combination of a strong economy, sustained consumer confidence, migration into the region and pent-up housing demand, “you’re seeing the real estate market bust loose,” Link said. “I would say that the market is being fueled to a great degree by attitude. We’re in a frenzy now and that is feeding part of this.”

The mini-housing boom also is being felt in the Santa Clarita Valley, where June single-family home sales rose 37.2%, to 269 homes--the highest total since the association began tracking sales there last year. It marked the fifth consecutive month Santa Clarita Valley sales have increased.

“In the Santa Clarita Valley, we’re having explosive growth,” said Nancy Starczyk, president of the Santa Clarita division of the Realtors association. “We’re looking to double our population by the year 2010.”

Tracking patterns seen elsewhere in the Los Angeles metropolitan area, housing demand in both valleys is being fueled in large part by so-called move-up buyers seeking more spacious, and costlier, homes with some of the toniest addresses around.

“We’re busy,” said Susan Park, regional sales manager at White House Properties’ Woodland Hills office. “There has been a bit of a westward trek” as move-up buyers come from less expensive areas of the San Fernando Valley.

Association figures show that nearly a quarter of the June sales, 318, came in the southwest Valley, which includes West Hills, Woodland Hills, Canoga Park and Winnetka. The southwest, one of five regions, has led the Valley in single-family home sales each month this year except January, when it ranked a close second to the area directly east.

Median prices, which represent the midpoint of all sales, were not broken out by region. The average price of all single-family homes sold in the southwest Valley was $327,000 in June, about $45,000 higher than the Valleywide average.

Starczyk said so far this year she’s seen 10 homes priced higher than $800,000 change hands in her region, compared with two in that range all of last year. “So it’s very dramatic,” she said of the high-end demand.

Pushing up the average figures are Valley sales in the seven-figure range. Of the 1,315 single-family sales, 26 cost more than $1 million, including a few that sold for $2 million or more, the association said.

Even though higher-end homes are doing well, real estate experts sounded a note of caution.

“Properties that are overpriced are not moving,” Link said. “There is a tendency in this kind of market for people to overprice. But buyers are not going to overpay.”

The rising tide is also lifting the spirits of beleaguered condominium owners, some of whom had seen a drop of more than $50,000 in their home values.

The median price for a Valley condo rose by nearly 40% in June over a year earlier, association figures show. The June median was $125,500, up $35,700 from the June 1997 median.

“Condo sales have really gone higher,” said Pat A. Zicarelli, president of Style Realty in Tarzana. She said that even with prices rising, “you can still purchase a condo for less than what you can rent for.”

The one factor keeping a damper on home sales, experts said, is a tight supply. Active listings for single-family homes and condos are each down about 11% compared with a year ago.

“That puts more upward pressure on prices,” Link said. “And it will put a little bit of a brake on the market.”

Link said he expects some cooling, but continued strong numbers.

“I don’t think we’ll cool off as we would in a normal year,” he said. “It won’t be quite as feverish, but it’s still going to be better than last year.”

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Still Rising

Valley home sales were 31% higher in June over the same month last year. And the trend continues--sales in June were 2.5% higher than in May.

June, 1998: 1,315

June, 1997: 1,003

Source: Southland Regional Assn. of Realtors