Southland Home Sales Up Briskly
A growing number of Southern Californians bought homes for the first time in March, contributing to double-digit increases in sales and setting the pace for a record-breaking year in the residential real estate market.
Brisk buying of entry-level homes, which began heating up late last year and has sizzled this year, helped fuel the 9,634 sales of new and existing homes and condominiums last month in Los Angeles County, a 14.9% increase over the number sold in March 1998, according to Acxiom/DataQuick, a La Jolla-based real estate information company.
Year-over-year sales increases for March were even more dramatic in San Diego and Ventura counties, which posted 25.6% and 24.7% increases respectively. Meanwhile, sales rose 9.5% in Orange County, the hottest March since 1989.
Condo sales were strong across the board, with sales jumping 22.8% in Los Angeles County, 36.2% in Orange County, 41.1% in San Diego County, and 10% in Ventura County.
“The March numbers point to a strong spring and summer, and the sales counts for 1999 are likely to surpass 1989, which is the strongest [year] on record for California,” said John Karevoll, an analyst for Acxiom/DataQuick. “I think it could be a record year for prices too.”
Robust sales of less-expensive entry-level homes led to modest increases in median home prices, which rose 1.1% in Los Angeles County, 5% in Orange County, 7.5% in San Diego County and 13.3% in Ventura County, Karevoll said.
When statistical adjustments are made for shifts in the market mix, California home values are continuing to rise 8% to 10% annually, Karevoll said. The rate is expected to be even higher for the top-end market, which continues to thrive.
Real estate observers point to a sustained level of prosperity--fueled by low interest rates, high employment and a strong stock market--for helping holdouts to take the leap into homeownership.
Although it has always been easier for people to buy a home if they believe it’s going to be worth more a year or two later, Karevoll said that perception is especially important for first-time buyers.
“A lot of renters are . . . doing the math and are finding out they can actually own something themselves for what they’re now paying in rent,” Karevoll said.
Added Bruce Karatz, chief executive officer of Los Angeles-based Kaufman & Broad Home Corp., “The economy is going at a nice clip and people are feeling good about Southern California and its prospects.”
Aided by its acquisition of Lewis Homes earlier this year, Kaufman & Broad sold 819 homes in the first quarter of 1999, a 48% increase over the 554 homes sold in the same period last year. Kaufman & Broad homes are considered among the most affordable in the new-home market, averaging in the low $200,000s in Southern California.
Sales of entry-level homes have also been strong in the resale market, according to Mike Lepore, manager of Century 21 Village Realty in Sierra Madre. He said roughly 70% of the office’s new listings are selling within 30 days, and multiple offers are common.
“We’re seeing a big increase in activity in the Altadena area, where there are more entry-level homes which sell in the $170,000 to $260,000 range,” Lepore said. “With interest rates being low, we’re also seeing a lot of first-time home buyers who are able to buy into the $250,000 range.”
The current mortgage payment on a median-priced home with a 30-year fixed rate mortgage and 20% down is about $940 a month, Karevoll said. A decade ago, the mortgage payment on a median-priced home would have been $1,317, due primarily to higher interest rates.
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Still Going Strong
Southern California home sales are on pace to break the record set in 1989. Prices are also up, but not as sharply as sales. Percentage increases in homes sold and median prices by county, March 1999 vs. March 1998:
Los Angeles
Prices: 1.1%
Sales: 14.9
Orange County
Prices: 5.0
Sales: 9.5
San Diego
Prices: 7.5
Sales: 25.6
Ventura
Prices: 13.3
Sales: 24.7
Source: Acxiom/DataQuick
