L.A. County Sees Home Sales Up 5%

Home sales in Los Angeles County rebounded in October, raising hopes that the region’s housing market will stay on track despite the economic downturn and the events of Sept. 11.

Boosted by strong purchases of lower-priced houses, sales overall rose 5% from October 2000, after a 6% decline in September. The median price rose by 12% last month from year-ago levels, to $227,000, according to a report Friday by DataQuick Information Systems.

The picture wasn’t so rosy in Orange County, which has a much smaller supply of affordable homes. Sales fell almost 6% last month, after a 10% year-over-year decline in September. The median price in Orange County rose 9% in October, to a record $310,000. But last month marked the first single-digit price increase in almost two years, and the figure may be overstating the appreciation rate for many homeowners because sales in the county are skewing more toward the high end.

Overall, Friday’s report suggested there is still strong housing demand in the region, and the recent dip in mortgage rates should push more people into the market. Inventory levels remain low, and on average homes are still selling within one month of being put on the market, according to the California Assn. of Realtors.

“In the face of all the grim tidings we’ve had, the confidence it takes to buy a home appears not to have been eroded,” said John Karevoll, the DataQuick analyst who compiled the report.

“Buyers are cautious but active,” said Richard Daskam, a broker at Century 21 Sparow-Shoreline in Long Beach.

DataQuick’s figures are based on escrow closings, which often come together 30 or more days after sales agreements have been struck. So the effects of the terrorist attacks, which exacerbated a slowing economy, still might show up in the next couple of months.

But clearly, the October report was encouraging to many in the industry. DataQuick’s latest figures are consistent with other data that show the housing market in Los Angeles County is holding up better than in many other areas.

One big factor is the availability of more affordable homes. According to a breakdown by DataQuick, sales of homes priced between $200,000 and $300,000 surged by 18% in Los Angeles County in the three months ended in October. Homes priced below $300,000 account for the vast majority of sales in Los Angeles County.

By comparison, in Orange County sales of homes ranging from $200,000 and $300,000 dropped by 2.5% during the August-October period. And sales of homes between $100,000 and $200,000 in Orange County plunged 31% in that same period, whereas they rose 6% for that category in Los Angeles County.

Overall in Los Angeles County, DataQuick recorded 9,400 sales of new and existing houses and condos last month. A big spurt of new-home sales inflated the percentage gain, but even so, sales of existing houses rose 3% in L.A. County.

Price gains, however, were strongest for existing houses; the median price surged 12% last month to $235,000. The median price of new homes, which are more expensive, was up just 3% to $300,500.

Karevoll attributed the sales drop-off in Orange County largely to the shrinking supply of homes for sale, rather than an indicator of weakening demand. Still, signs point to a slowing market there.

In Orange County, the biggest increase in median price was in the cheapest market--resale condos, which surged 15% last month to $208,500. The typical new-home price rose by less than 5%, to $464,500, and sales in this category dropped 14% from year-ago levels.

DataQuick’s report Friday showed no indication of increased financial stress among homeowners in the region. But Karevoll is keeping a close watch on whether the number of buyers using adjustable mortgages grows, a sign that people are stretching their finances to buy homes. The rate, which stands at about 20% in both counties, has shown only incremental change over the last year.