Area Home Prices Dip, but Sales Hold Steady

Single-family home prices in the San Fernando Valley fell slightly in May, but sales volume remained steady in what industry officials called a sign of a continued tight housing market.

The Southland Regional Assn. of Realtors reported Monday that the median price for a single-family home was $239,000 last month, down from $240,000 in April and 2.4% shy of the all-time high of $245,000 set in June 1991.

The decline marked the second month-to-month drop since March, when median prices fell from $225,000 to $223,000. Home prices have been rising almost steadily since February 1997, when they hit a low of $155,000.

While prices from April to May dropped slightly, the number of homes sold rose 4.7% over April and 1.7% from a year ago, the group said.

Median condo prices increased from $133,000 in April to $135,000 last month, but the number of condos sold dipped slightly by 1.8%.

Compared with May 1999, however, condo sales are up 34.8%. Experts say the condo market is being driven by the rise in interest rates and by first-time home buyers who are being squeezed out of the single-family home market.

Association Executive Vice President Jim Link said the increase in the number of single-family homes sold reflects continued strength in the housing market, though he noted the pace of growth was likely to slow in the coming months.

“Home sales will continue to be strong, though we may see that they’ll drop by year’s end compared with a year ago.”

Even with more modest growth and rising interest rates, Link added, median home prices will ultimately eclipse the June 1991 record by year’s end.

Frances Lewis, a sales manager at Fred Sands Realtors, said demand was still outstripping supply, which in the near term would keep prices going up. “We’re still seeing a lot of multiple offers on properties,” said Lewis. “And we’re seeing a lot of first-time home buyers purchasing condos because of the affordability factor.”

Some 426 condominiums were sold in May against 316 units the year before. Median prices for condo units jumped 5.9% over the year from $127,500 to $135,000.

Median prices for condo units were up marginally, about 1.5% from April, the association said.

On the single-family-home front, 1,576 houses were sold last month compared with 1,447 in May 1999.

One factor affecting prices and sales, the association report said, was a limited inventory of properties for sale.

Listings of total properties were down 14.5% from a year ago and were at least half of a six-month inventory typical for a region the size of the Valley.

Single-family listings, for example, were down 14.5% from a year ago while active listings for condos dropped 15.9%

Leslie Appleton-Young, vice president and chief economist of the California Assn. of Realtors, said interest rate increases are starting to have an effect on the Valley’s housing market but that “well-priced, quality properties” would continue to sell quickly.

“In terms of inventory, we may see a slight increase in the coming months,” Appleton-Young said. “The good stuff is going to sell rapidly because the demand is still there.”

That appears to be the case even to the north. In the Santa Clarita Valley, the median price of a single-family home hit a record high of $243,500 for the month, 7% better than a year ago and 1.5% ahead of April figures.

The median condo price rose to $137,000, behind the $140,000 median sales price record hit in August 1999.

*

* NO HOUSING SLOWDOWN: Prices and sales in L.A. and Orange counties are strongest in years. C1