The average sales price of a single-family home in the San Fernando Valley shot up to $175,800 in May, an increase of 5.6% from the month before and 11.9% from May, 1985, the Valley Board of Realtors said Monday.
Board President Temmy Walker called the sharply higher prices a cause for concern. She said that, if prices duplicate the upward spiral of the late 1970s, buyers could once again find themselves shut out of the market.
But, she said, it is too soon to determine the trend. Walker said she doesn't "really believe some of the lower-priced properties have gone up as much as the averages indicate."
Figures May Be Skewed
Instead, she said, more high-priced units may be selling now, skewing the figures. The board, whose statistics reflect sales in the area extending from North Hollywood to Agoura Hills, reported that 1,414 homes were sold last month, up just 1.3% from April but up 28.9% from May, 1985.
Condominiums continued to sell strongly in the Valley contrasted with the depressed market that prevailed a year ago, but prices were flat, perhaps because of the large oversupply.
The board reported an average condo sales price of $113,700 in May, up 3.5% from the previous month but up just $400, or .35%, from May, 1985. Realtors sold 270 condos during the month, up 8.9% from April and a whopping 94.2% from the year before.
Market Still Not Healthy
Walker cautioned that the 94.2% increase was up from "virtually zero" last year. She said the condo market is better but still not healthy.
Monthly sales figures compiled by the board are only for residences sold through licensed realtors, and therefore do not reflect the undetermined number of homes and condos sold without the help of a real estate agent. But the figures point to trends, and the trend for the past several months is sharply higher sales, apparently fueled by lower mortgage interest rates.
Contrasted with the same months in 1985, single-family home prices were up 4.7% in April, 6.5% in March, 8% in February and 7% in January.
Walker said the pace in the Valley real estate market is so strong that lenders and appraisers are finding it difficult to keep up with all the work. She noted that mortgage rates in the Valley, which hovered in the 9.5% range a month ago, have edged up to about 10%.
"The lenders are doing this to slow it down a little," she said. "They're overwhelmed. And they only have so much money."