The average price of a single-family house in the San Fernando Valley climbed to a record high of $311,000 in August, the San Fernando Valley Board of Realtors said Monday.
The latest average price was only about 1% higher than the previous record of $308,100, set in June, and a 5% jump from the average of $295,800 in July. The latest monthly figure marks a 21% jump from the $257,100 average price recorded in August, 1988, the board said.
21% Sales Drop
The higher prices came despite a 21% drop in resales of single-family houses last month, to 923 units from 1,171 units in July. Sales also fell 44% from a year earlier, when 1,648 units were sold in August, 1988.
The average resale price of a condominium fell less than 1% to $150,200 in August from $150,600 in July. But the August price marked an increase of 17% from $128,100 a year earlier. In May of this year, the average condominium price set a record of $153,410.
Condominium resales, meanwhile, dropped 29% to 295 in August from 414 the previous month. The number of resales also fell 44% from 526 the previous year.
August was the third consecutive month that house resales actually dropped, and that apparently contributed to a record backlog of houses and condominiums for sale in the Valley. There were 9,276 houses listed for sale in August, up 6% from July and 63% from a year earlier. Meanwhile, there were 1,839 condominiums offered for sale, up 13% from 1,632 in July and up 10% from 1,671 a year earlier.
The board said the combined inventory of 11,115 houses and condos would take 9 months to sell, if housing sales continued at the August pace.
Mortgage interest rates increased slightly by late August compared to June and July, when scattered banks and savings and loans offered fixed-rate mortgage loans with interest rates of less than 10%. But Buddy Bernard, president of the San Fernando Valley Board of Realtors, said in a statement, "It's my feeling that the current slowdown in sales is price driven not interest-rate driven."
Fixed Rates Drop
The fixed rates of 10% to 11% offered by lenders in August on conventional 30-year loans were still lower than the rates of 11% to 12% that prevailed in the spring.
The board suggested that while soaring prices were slowing sales, the inventory of properties for sale would eventually slow the price increases.
"I think you'll now find that buyers can afford to be much more selective and will bargain a lot harder," the board's executive vice president, Jim Link, said in a statement. "I've got to believe the increase in listings and slowdown in sales eventually will lead to some price reductions."
The Valley realty board, California's largest, reports sales of houses and condominiums by its members in the area from North Hollywood to Agoura. Its statistics do not include most new residences, which generally are not sold by real estate agents, or sales by homeowners who sell their homes without agents.