Valley Home, Condominium Sales End Decade on High Note

Buoyed by a strong economy, job growth and higher household incomes, the San Fernando Valley posted 16,794 sales of existing housing last year--a record for the decade--while prices continued to climb.

The combined single-family home and condominium sales total in the Valley last year generated more than $4.1 billion in direct and indirect benefits for the local economy, according to a report released today by the Southland Regional Assn. of Realtors.

But the number of single-family homes sold last year in the Valley actually fell compared to the year before, the report said.

A total of 12,858 single-family homes changed owners in 1999, a number that was 2.9% lower than the 13,242 sold in 1998, the report said.

Even with the dip in sales activity, Valley single-family homes last year went for an annual median price of $212,292, jumping 11.7% from $190,117 in 1998.

The price increase represented the fourth-best year of the decade, the report said.

Condominium buyers snapped up 3,936 units last year compared with the 3,313 they bought in 1998, the report said. The 18.8% annual gain represented the highest sales total in 10 years.

The median price for condos in 1999 rose 1.4% to $122,741 from $113,667 in 1998, the report said.

Analysts say the Valley market is characterized by an expanding economy, job growth and higher household incomes. But they caution that the rapid inflation in prices has slowed, largely because buyers--alert to the possibility of a downturn--are more shrewd and patient than in the past.

“It used to be that people would buy as much house as they could, as soon as they could and finance as much as they could,” said John Karevoll, an analyst with La Jolla-based Axciom/DataQuick, which monitors real estate activity nationwide.

“Now, people are being more prudent; they are walking away from overpriced homes and not stretching their finances to the max,” he said. “If you go back 10 years--the frenzied late ‘80s--people were making bad decisions; they are not now. They are . . . doing their homework, figuring out what they can afford and where they want to live. They are not getting carried away.”

Barring any unforeseen events, association officials said that most of the equity lost during the recession of the early 1990s could be made up by the middle of this year.

The real estate brokers point to Valley condominium median sales prices. The median reached a decade high of $151,300 in June 1991, dropped to a low of $80,000 in October 1996 and rebounded to the current price of $122,741.

Similarly, single-family median sales prices reached their decade high of $245,000 in November 1989, plummeted to $155,000 in February 1997 and rose to $219,500 last December, the report said.

“There are no hard and fast rules and many factors are involved, including price range and location,” said Jim Link, executive vice president of the association. “But we believe full recovery is in sight if the resale market keeps moving at its current pace.”

In the Santa Clarita Valley, 3,904 home buyers closed escrow last year, pumping $841 million into local coffers, the report said. The annual combined condominium and single-family home sales in 1999 was 9% ahead of the prior year.

Not only did the region see an increase in the number of homes that changed hands last year, but in the median sales price as well, the report said.

The 1999 median sales price for single-family homes rose 11.9% to $228,808 from $204,575 in 1998. Similarly, last year’s median sales price for condos jumped 6.9% to $132,758.

“Santa Clarita remains one of the fastest growing, more desirable areas to live,” Link said. “Even rises in resale prices are unlikely to dampen the demand for housing.”

In the San Fernando Valley, the local housing market has recovered from the 1994 Northridge earthquake but is still experiencing the lingering effects of the economic recession of the early 1990s, Karevoll said.

“We have run several studies on natural disasters to measure the effect that earthquakes, floods and fires have had on the market and it isn’t all that big,” Karevoll said. “There is a time shift where a lot of activity gets put off and then there is a catching-up factor. Over the five years after the earthquake, the Valley has come back nicely.”

Karevoll said economic factors such as job growth and household income have much more of an influence.

“Prices peaked in the early 1990s, came down and then dropped off a cliff,” he said. “They didn’t hit bottom until 1994 or 1995 and then they dragged along for a while. Only recently have home prices approached the level they were nine years ago, and we expect those trends to continue.”