Record for Home Sale Prices Proves Elusive

The San Fernando Valley’s residential real estate market started the summer with more simmer than sizzle in June, as prices and sales remained virtually unchanged from May.

The median price for a single-family home (the point at which half of the homes sold for more and half cost less) was $240,000 in June, according to figures released Monday by a real estate trade group. That put prices back to the April mark, after they dropped to $239,000 in May, but still short of the all-time Valley high of $245,000 set in June 1989.

And while the June median represents an 11.6% gain over last June’s number, it marked the third straight month that the median has hovered around the $240,000 mark--a sort of glass ceiling that the area market has not broken through since June 1990. Local real estate experts predicted that the market will meet or beat the record later this year, but for June, if there was heat in the Valley it wasn’t coming from home sales.

“The market’s lost a little bit of steam, it’s definitely tapered off,” said Jim Link, executive vice president of the Southland Regional Assn. of Realtors, which released the report. “We were in a sprint, now we’ve slowed down to a steady pace.”

While Valley figures show a region still on the mend, another report released Monday by DataQuick Information Systems Inc., a La Jolla research firm, indicated that the median price for a home sold in Los Angeles County has reached pre-recession levels of $203,000.

That report tracked new and existing home sales in June, while the report from the Realtors includes only closed escrows on existing homes.

Leslie Appleton-Young, vice president and chief economist for the California Assn. of Realtors, the statewide trade group, said that even though the Valley has yet to hit the magic number of $245,000, she still sees strength in the local market.

Each month this year, single-family home prices for the Valley have increased--usually by double digits--over the comparable month last year. So far this year, she said, the median price in the Valley is up about 10% over the first six months of last year.

(CAR figures for L.A. County for June have yet to be released.)

“I don’t think ‘losing steam’ would be a correct characterization for a market where you have single-family detached homes still going up 10% year over year,” said Appleton-Young. “I think the market is moderating a little bit, but . . . the trend in prices remains strong.”

If nothing else, the trend over the past several months has been--steady.

The median single-family home price has been between $220,000 and $240,000 for most of the past 10 months.

Similarly, in the Santa Clarita Valley, single-family homes have sold for about $240,000 for each of the past four months. The June median of $240,300 was down from the May figure, but up 5.6% compared with June of 1999.

June sales in the San Fernando Valley edged up slightly, with 1,171 single-family homes changing hands compared with 1,150 in May. But the June sales tally was down nearly 7% from June 1999, and was down nearly 11% from June 1998.

Link noted that sales in the Valley were so strong last year that he had expected some loss of momentum--as rising prices, rising interest rates and shrinking inventories combined to curtail sales.

“Buyers are out there in good numbers,” said Link. “There isn’t enough inventory to satisfy demand,” pushing prices up from levels seen last year.

Anne Greenfield, a Studio City-based agent with Coldwell Banker, said she has been having “a horrible time finding property.”

The figures reported by the Southland group reflect an average of prices throughout the Valley. Greenfield said that in the southeast Valley, where most of her sales take place, “I continue seeing an increase in prices,” compared with last year and early this year.

“There just isn’t the inventory to sell,” she said.

Would-be buyers, nervous about getting into a home, are placing multiple offers on properties, agents said. It’s not quite the feeding frenzy of the early ‘90s, or even last year, but it is helping nudge prices upward--and in some cases out of reach.

The Southland group reports that the affordability index for the area--the percentage of households that can afford to buy a median-priced homes--is 32, compared with 36 for the Los Angeles area (including the Valley).

“I’d love to see prices leveling off,” said Greenfield. “I think it’s getting inflated now and it’s scary.”

Appleton-Young noted that heftier prices in the single-family market have helped fuel growth in the condo market.

In June, 432 condos changed hands in the Valley, up only slightly from the 426 sold in May, but up 7.7% from May 1999. The median price of $140,000 was up 10.2% from June 1999, but up only 3.7% from May of this year.

In the Santa Clarita Valley, 149 condos were sold in June, up 44 units from June 1999 and up 24 from May. The median price was $139,900.

Link predicts that, by year’s end, prices will be up by 8% to 12%, even though the number of sales may not match the 1999 tally.

“I still think prices will continue to inch up,” Link said. “By the end of the year, we’re going to get darn close to that $245,000.”