Existing Home Prices Up 10% in L.A. County

Buoyed by low mortgage rates and a growing economy, the local real estate recovery picked up steam in April, with the median price of existing homes sold in Los Angeles County jumping nearly 10% from year-ago levels, according to figures released Thursday.

The median sales price rose to $187,500--a 9.6% increase from the same month last year and the largest year-over-year gain since February 1990, according to statistics compiled by Acxiom/Dataquick Information Systems. The figures do not reflect the sales of new homes and condominiums.

“That [1990] increase was the last of the big ones,” said real estate analyst John Karevoll of Acxiom/Dataquick. “Then we went into the negative and stayed like that for several years.”

The number of homes sold in April also posted a robust 12.5% year-over-year increase, with 6,810 properties changing hands, according to the monthly report.

The rate of increase in sales and prices is expected to moderate in coming months, but Los Angeles County is still expected to exceed earlier real estate forecasts. Chapman University, for example, had projected a 4.5% increase in the county’s median home price this year, said Esmail Adibi, director of the school’s Center for Economic Research. But the real estate market might actually post an increase of as much as 7%, he said.

Los Angeles real estate has benefited from regional job growth and low mortgage rates, according to housing observers and agents. Stable home prices--after years of decline--have also given many people the confidence to enter the market after sitting on the sidelines for much of the 1990s.

“That’s part of the reason you have seen a surge in home prices,” Adibi said.

The spurt in prices also reflects a sharp increase in the pace of sales and a reduction in the number of homes for sale. In November of 1994, for example, it would have taken 16 months to exhaust the inventory of homes for sale, according to industry figures. But by November of last year, there was only a six-month supply of properties.

In La Canada, strong demand for residences in the $400,000 to $800,000 range has resulted in as many as eight offers for the same home, according to Lynn Beckenhauer, who manages the La Canada office of Dilbeck Realtors. “It’s tough to be a buyer right now,” she said.

In the South Bay, Coldwell Banker agent Marsha Salsido says entry level homes are selling quickly and prices are spiraling. A basic, three-bedroom house in Manhattan Beach that would have sold for $450,000 10 months ago now fetches $525,000, she said.

However, Salsido says that buyers are not jumping on every house for sale and that many properties still languish on the market when priced way above comparable homes.

“We are getting multiple offers,” Salsido said. “But it’s not a green light for sellers to list their homes at unreasonable prices.”

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Moving Up

Los Angeles County saw the median price of an existing, single-family home jump nearly 10% in April from the same month last year. Median sales prices,* in thousands:

April: $187.5

*New homes and condominiums are not included.

Sources: AP, Reuters