Housing Prices Close Out ’99 on High Note

The median home price in Los Angeles County rose 4% in December from the year-earlier month, pushing the level for all of 1999 close to its all-time high set in 1991, according to preliminary figures released Monday.

In the hotter Orange County market, meanwhile, the median price surged 9% last month to a record, dwarfing the previous high and capping another strong year for the region’s bellwether housing market, according to final figures.

Analysts said the gains for both counties are expected to continue into this year, thanks to the strong economy, booming job market and stock-market profits.

Preliminary reports for Los Angeles County show the median price--the point where half the new and existing homes and condos sold for more and half sold for less--advanced in December to $192,000. That pushed the median price for the entire year to $188,000, within range of its annual high of $193,000 set eight years earlier during the peak of the previous housing cycle.

Orange County’s median home price in December hit $258,000, pushing the price for the entire year to an all-time high of $240,000. That was up 6% from $227,000 in 1998 and well above the $218,000 level set in 1991.

As in Orange County, the pace of home appreciation in Los Angeles County slowed last year from unusually strong growth in 1998. But analysts said that partly reflects the proportionately higher sales of more moderately priced houses this year in places such as Palmdale and Lancaster.

“There’s been a surge of activity at the entry-level market that makes the [overall] rate of change appear to be more moderate than it really is,” said John Karevoll, an analyst at Acxiom/Dataquick Information Systems Inc., the La Jolla-based firm that prepared the housing report released Monday.

In December, the number of home sales in both Los Angeles and Orange counties declined slightly from December 1998, when activity was especially brisk.

Throughout last year, home prices in Orange and Los Angeles counties recorded steady gains. But in November and December, sales of new homes saw a sudden spike, as builders sought to clear inventories before the end of the year. That helped push up overall home prices.

In Orange County, home prices have surpassed year-earlier numbers for 31 consecutive months. And given Orange County’s strong job growth, Karevoll said, home prices are expected to rise by as much as 9% annually “well into this year and beyond.”

One of the driving forces in home sales throughout the state has been the stock market. More people have been using proceeds from the stock market or borrowing from their 401(k) or retirement plans to help come up with a down payment.

In Orange County, for example, about 1 out of every 5 homes bought in the third quarter of last year was financed partly by stock market proceeds, according to a survey by the California Assn. of Realtors, a Los Angeles-based trade group. In Los Angeles County, the stock market figured in about 13% of the purchases in the third quarter, the survey said.

Housing analysts said the market remains strong because of the booming economy and strong buyer confidence.