Sales of Homes Soar in Southland

Buyers in the Southland snapped up homes last month at the most hectic rate for a January in 13 years, triggering a steep run-up in prices, according to a report released Tuesday.

In Los Angeles County, 8,087 new and existing condos and houses were sold last month, up more than 22% from a year earlier and the biggest volume for a January since the frenzied market of 1989. The median price of homes sold advanced 17.5%, to a record $235,000, according to DataQuick Information Systems Inc.

Orange and Ventura counties also saw double-digit sales increases last month, as consumers moved to lock in on low interest rates. More renters have been driven to buy homes as rising apartment rents approach the cost of homeownership.

Although the January spike in sales was unusual and not likely to be sustained, analysts said the DataQuick report reaffirmed the enduring strength of the housing market, which has cushioned the blows of an otherwise sluggish economy.

A separate national report Tuesday said that construction of new homes and apartments in January far exceeded expectations, partly helped by the milder winter weather. And some home builders said orders early this year were running at a brisk pace, indicating consumers are becoming more confident about the economy.

At Westwood-based KB Home, the nation’s third-largest home builder, orders for new homes in California jumped almost 27% last month from a year earlier, Chief Executive Bruce Karatz said.

“There’s a growing consensus that the economy has seen its worst days, and while [consumers are] unsure about how quickly it will recover, they’re no longer concerned that we’re in a downward spiral,” Karatz said. “That puts a floor on prices and gives people confidence they can buy without making a bad choice in timing.”

Many buyers in the Southland felt January was the right time.

DataQuick’s report showed that sales in Los Angeles County climbed more than 20% in every category--existing houses and condos as well as new homes. John Karevoll, the analyst who prepared the report, said the January figures were somewhat inflated by sales carried over from December, when lenders were slowed by the refinancing boom. DataQuick’s report is based on escrow closings.

Karevoll cautioned against reading too much into one month’s data. In fact, when combining sales in November, December and January, the total is up a more modest 3.3% from the three-month period a year earlier.

Still, Los Angeles County home sales in recent months have been outpacing those in more expensive markets such as Orange County, largely because of its more abundant supply of lower-priced homes. But the strong demand and sales are reducing inventory levels, and that is triggering a surge in prices.

In Los Angeles County, the 17.5% jump in the median price last month was the strongest since August 1989, when prices rose 19.5%, according to DataQuick.

“It’s frightening to see prices going up like this,” said Wendy Furth, a Coldwell Banker agent in Northridge.

More-affordable homes are moving especially fast.

At the present sales pace, the current supply of resale homes on the market would be depleted in 2.9 months in Los Angeles County and in 2.3 months in Orange County, according to the California Assn. of Realtors

“A lot of times before something comes on the market there’s already an offer on it,” said Ian Medina, president of SIM Real Estate in Los Angeles. He said the number of renters looking to become purchasers in the $230,000 range or lower has increased rapidly in recent months because of expanding programs that help first-time buyers. “There’s a lack of inventory in our market, and that translates into a seller’s market.”

Analysts said that pricier homes--those costing $500,000 or more--in Los Angeles and Orange counties are generally showing minimal rates of appreciation, compared with those in communities such as Compton, South-Central Los Angeles, Palmdale and Inglewood, which are showing double-digit price gains.

In Orange County, which also experienced the best January in 13 years, sales jumped 14% from a year earlier, to 3,134 houses and condos. The median price of those sales was $308,000, or nearly 12% ahead of last year, but was down from the $332,000 mark in December largely because fewer expensive new homes were sold.

Ventura County also saw steep growth, as the median price rose 10% to $284,000 from a year ago. Sales jumped 28% from the previous year.

Data for Riverside and San Bernardino counties were not available Tuesday.