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Winners and Losers of 1997

Home Prices Turn Up--Finally--in '97

January 18, 1998|From a Times Staff Writer

As we do each January in this space, we offer you this week one final look at Southland home prices and sales--by ZIP Code--for the last year.

And what a difference a year makes. Our year-end review has been grim for most of the 1990s, but we finally have a year to gaze on with a smile instead of a scowl.

Here are the highlights of 1997:

* Sales and prices were up in most neighborhoods--way up in the Southland's high-end communities--and most housing markets are continuing to strengthen in 1998.

* Home prices have regained about a third of the value they lost earlier this decade, and 1998 might see us almost back to where we were before the fall.

* The number of homeowners selling at a loss dropped by 50%.

* The number of borrowers defaulting on their mortgages is down for the first time in the 1990s.

Here are the details, from Acxiom/DataQuick Information Systems of La Jolla, which provides The Times with real estate information:

Sales:

An estimated 241,000 new and resale houses and condos were sold in Los Angeles, Orange, Ventura, Riverside, San Bernardino and San Diego counties in 1997.

That was up 11.3% from 216,588 for 1996 and was the highest number sold since 266,824 in 1990.

Home sales ended their several-year slump and began climbing in mid-1995. They increased moderately in 1996 and early 1997 and picked up again significantly toward the end of last year.

Sales in December 1997 were about 20% higher than they were a year earlier, and the last four months of 1997 had the strongest sales pace of the decade, Acxiom/DataQuick reported.

Prices:

Though there is a lag time, a rise in sales counts eventually means price increases.

Southland prices stopped falling in early 1996, then dragged along bottom for most of that year and started going up in 1997. The increase was slow at first but picked up steam as the year went on.

Year-over-year price increases were about 7% for the last few months of 1997, and prices are rising. Last year's median was $172,000, up from $161,000 for 1996.

About a third of the lost home value from the early part of the decade has been regained, according to Acxiom/DataQuick.

"If current trends stay in place, most of the home equity lost during the recession will be regained by the end of the year," said Mike Ela, Acxiom/DataQuick's president.

"Prices should be back at 1991 levels sometime in 1999," Ela said.

Expensive neighborhoods experienced the market turnaround first, followed by move-up neighborhoods and then areas with mid-sized homes. Only during the last few months have the entry-level markets showed signs of turning around.

Of the following 621 Southland ZIP Codes that had five or more sales last year, 411 showed a rise in median price. A year before, that was about the number of ZIP Codes in decline.

Other highlights:

* Notices of default, the first step of the foreclosure process, totaled an estimated 86,500, down 20.7% from 109,122 for 1996. That's the first decline of the decade.

* One of every six homes was sold at a loss in 1997. It was one of three in 1996.

* The monthly payment for a typical home purchase mortgage was $954 for 1997, up from $926 in 1996 but much lower than $1,348 for 1989.

So, you ask, how are things going in your neighborhood? Check out the ZIP-by-ZIP chart that follows.

But please remember that an increase or decrease in median from one year to the next can reflect a change in home values, but it can also reflect a shift in market mix.

For example, if large homes sell one year and small homes sell the next year, the decline in median probably doesn't reflect a decline in home values.

In Malibu, for instance, the market came back with a surge of sales at the high end. As the sales activity migrated downward, lower-priced Malibu homes accounted for bigger portion of overall sales, tugging the median down.

The complete list follows:

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