‘98 Home Sales Best in Decade, Report Shows

Several communities in the San Fernando and Santa Clarita valleys posted some of the largest home value and sales gains in Los Angeles County in 1998, real estate experts said Monday.

Year-end figures, which show that a whopping $4 billion in residential real estate changed hands last year in the San Fernando Valley, indicate that the local real estate market has improved, compared not only with the weakened Valley market of the early and mid-’90s, but also when measured against the Los Angeles region as a whole last year, including the tony Westside.

A report issued Monday by a real estate trade group confirmed what had been suspected for months: that 1998 marked the Valley’s best residential real estate showing of the decade. More than 16,500 properties--existing single-family homes and condos--were sold during the year, a nearly 12% gain over 1997, and the best full-year tally since 1989, according to the Southland Regional Assn. of Realtors. The figures do not include sales of new homes.

At the same time, the San Fernando Valley saw a nearly 15% increase in the median price for a single-family home--jumping from $165,833 in 1997 to $190,117 last year.

“The Valley, for 1998, was probably a tad stronger than the rest of the county,” said John Karevoll, a real estate analyst with Acxiom/DataQuick.

Noting that property values in Encino and Tarzana gained more than 25% during the year, two of the largest gains in the county, Karevoll added: “The Valley is doing pretty good.

“The Westside and all those high-end areas, their flag was waving in the wind back in 1997,” he said, adding that some high-end areas saw a drop in sales last year. Thanks to a good supply of middle to upper-end housing, the Valley is now cashing in on the surge that started in the high-price districts.

“I think we’re seeing an increase in not just the first-time buyer,” said Beth Sommer, 1999 president of the regional association. “We’re seeing an increase [in sales] at all price levels.”

Several real estate experts predicted that sales in 1999 would continue to be strong.

Karevoll said he can’t see any reason the trend would falter, “unless there’s an event, with a capital ‘E’.

“There really isn’t much that’s going to pull the plug on the current trends,” he said.

The combination of low interest rates, steady job growth in the region and the fear of price hikes lured 13,242 buyers to purchase single-family homes in the San Fernando Valley in 1998, an increase of nearly 15% over 1997.

That included December sales of 1,015 homes, a tiny increase from November’s 1,012 and a 12% drop from December 1997. In fact, December was the only month in 1998 that saw lower sales than the same month in 1997. Real estate experts called that a glitch that reflects seasonal buying patterns.

The nearly 15% gain in single-family home prices for the year put values at levels not seen since 1993. While prices are still 20% off the highs seen in the late ‘80s, the double-digit gain represents a reversal of years of slumping values, experts said.

Condo owners saw the biggest percentage jump in their home values since at least 1987, association figures show. Though sales of condos for the year were basically flat at 3,313, the median sales price rose more than 24%--from $91,367 in 1997 to $113,667 last year.

And activity remained strong in the Santa Clarita Valley, which ended the year with 3,594 properties changing hands, valued at $743 million. Complete figures for 1997 were not available, but the association estimates that the region posted a 33% gain in home sales last year. Sales of new and existing homes in Castaic rose by nearly 50% last year, for one of the largest gains in the county, Karevoll said.

For this year, experts predicted that home values will continue to rise, but perhaps at a more modest pace than that seen in early 1998.

“I think we’re looking at 5% to 9%; single-digit appreciation,” said Jim Link, executive vice president of the association. “It will certainly be enough to where home owners feel their investment in housing is turning in a fair return.”

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Resale Prices Rising

Median resale prices for single-family homes in the San Fernando Valley, 1987-1998

1987: $161,582

1998: $190,117

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Source: Southland Regional Assn. of Realtors

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Valley Home Sales

Monthly single-family home sales in the San Fernando Valley for 1998

April: 1,222

December: 1,015

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Source: Southland Regional Assn. of Realtors