Southern California home sales during the first half of the year posted their strongest showing since 1990, with regional home prices holding steady and even climbing in Los Angeles County after a long decline, according to a real estate survey released Monday.
The results, although sedate compared with the roaring real estate market of the late 1980s, indicate the region is healing from a brutal real estate recession that began more than six years ago. Sales of all new and resale homes and condominiums during the first six months of the year totaled 105,642, up about 22% from the same period last year, according to DataQuick Information Systems, a La Jolla-based real estate services firm. The median sales price of a Southern California home remained flat at about $160,000.
"We believe that the housing market in terms of prices and sales bottomed out in early 1996," said Esmail Adibi, director of the Center for Economic Research at Chapman University in Orange. "Prices, on average, for the year are going to be slightly or marginally higher" than last year.
During June, home sales in Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties totaled 19,775, up 5.9% from the same month last year. The median sale price in June for the six-county region rose 0.6% from the year-ago figure to $164,000.
"We're actually close to what could be called a 'normal' market. Sales are up from the low levels of the past few years but still well below the overheated pace of 1989 and 1990," Donald L. Cohn, chief executive of DataQuick, said in a statement.
Despite the promising results so far this year, industry observers expressed caution, noting the rise in mortgage rates and the surge in home foreclosures. Comparison figures for sales and prices are also benefiting from the fact that stormy weather and higher mortgage rates depressed sales in the first part of 1995.
The real estate market experienced a similar rise during the first half of 1994, when sales rose about 23% above the previous year, only to suffer a setback when higher mortgage rates and continued economic weakness undermined the market.
Last month, home prices remained volatile across the region. Los Angeles County, for example, posted a rare increase, with the median rising 1.2% in June to $166,000, according to DataQuick. The median also rose in San Diego--up 1.8% to $170,000--and in Ventura, where it increased 2.6% to $198,000. However, the median price fell 1.5% in Orange County to $196,000, dropped 0.8% in Riverside to $128,000 and slipped 0.8% in San Bernardino to $122,000.
In the San Fernando Valley, Fred Sands real estate agent Stephanie Vitacco said home prices have been weighed down by an abundance of foreclosure sales. However, sales have remained brisk, particularly with bargain-priced homes. One of Vitacco's listings, a Granada Hills home with an asking price of $189,000, has received four offers after only three days on the market. It will probably sell for more than its asking price, she said.
"They are selling with multiple offers if they are priced right," Vitacco said.
The pickup in sales reflects the improved health of the regional economy and the creation of new jobs, Chapman University's Adibi said. If mortgage rates do not climb much higher and the economy remains steady, he said, prices regionwide could be expected to climb perhaps 0.5% in 1996--a tiny but significant gain after nearly five years of falling prices.
"If nothing drastic happens, this [market turnaround] should continue," he said.