California Home Sales Hit a Decade High in ‘98, Survey Says

Sales of California homes hit their highest level of the decade in 1998, and a strong start this year has prompted some real estate analysts to revise upward their estimates of sales and prices for 1999.

A robust economy coupled with low interest rates propelled the sale of 504,934 new and existing houses and condominiums in California last year, a 19.7% increase over 1997, according to real estate information company Acxiom/DataQuick.

Last year’s figure falls short of the all-time high of 530,112, reached in 1988.

“The sales count for California was very close to, but not ahead of, the 1988 and 1989 numbers, but there now appears to be a good chance that 1999 will exceed those sales levels,” said John Karevoll, an analyst for La Jolla-based Acxiom/DataQuick who compiled the report.

Although she agrees that the housing market looks more robust than she previously forecast, Leslie Appleton-Young of the California Assn. of Realtors believes this year’s sales will not exceed last year’s level because the inventory for the year will be lower.

“The market has gotten off to an unbelievably strong start in the first quarter of this year,” said Appleton-Young, the trade group’s vice president and chief economist. “The problem is there aren’t many properties to sell because people are buying so quickly.”

According to Karevoll, sales rates are increasing fastest in affordable areas flush with entry-level homes. That trend represents a shift; previously it was mid-range homes fueling the surge in sales.

“A year ago, the entry-level market was just recovering, and now it’s clearly going strong,” Karevoll said.

The dollar amounts changing hands hit an all-time high last year as prices and sales both increased, Karevoll said. Buyers paid a total of $113.4 billion in 1998 for houses and condominiums, up 27.3% from the year before, when they spent $89.1 billion.

“It’s an awful lot of money,” Karevoll said, “but I think it’s very likely that 1999 can exceed that figure.”

When statistical adjustments are made for shifts in market mix, California home values are currently rising at an annual 8% to 9% rate.

The bulk of last year’s sales occurred in the resale market, in which 441,210 homes and condos were sold, up 20.2% from the 366,923 for 1997.

The median price paid for a resale home rose to $169,000 last year, a 5.6% rise from 1997’s $160,000 but far short of the all-time high of $177,000 in 1991.

Parts of Southern and Central California saw the strongest sales increases, according to Karevoll. The weakest were in the Bay Area, which had emerged from the early-’90s recession before the rest of the state and which saw its sales growth rate peak two years ago.

The California Assn. of Realtors, meanwhile, released its own, rosier findings Wednesday on last year’s home sales. The group, which calculates its numbers based on a sampling of transactions having closed escrow reported by multiple listing services throughout the state, said sales of existing homes rose to 628,260 in 1998--a record high and a 13.1% increase from the 555,320 sales pace it reported for 1997. The median price of an existing single-family detached home was $201,410, an 8% increase from the previous year.

Unsold inventories also declined from seven months’ worth in 1997 to 5.4 months last year.

Local real estate agents say their markets are showing signs of increased strength. Although home sales got off to a slower start this year compared with last, according to Eugenia Hernandez of Century 21 Larson Realty Inc., recently she noticed that homes are starting to move more quickly in the Burbank area.

“In the past week, I listed three homes and have already sold them,” Hernandez said. “I hope that means that people were enjoying the holidays and now they’re back in the market.”

In Glendale, Jacquie Rudell, a Coldwell Banker branch manager, said February is off to a good start.

“We have more buyers than listings,” Rudell said. “If someone lists their property at a fair price and it has appeal, it sells right away.”

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Near the Peak

Home sales in California topped 500,000 for the first time this decade in 1998. California house and condo sales, in thousands:

1988: 530,112

1998: 504,934

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Source: Acxiom/DataQuick