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Fading Frenzy

Summer's sizzle has been replaced by fall's fizzle. Two buyers and two sellers cope with the changing housing market.

Jittery Stock Market Set Tone for Slowdown


The scorching pace of Southland home sales earlier this year has mellowed to a smolder in most communities, experts say, and some high-end markets are downright chilly this autumn.

Buyers and sellers are responding to the market's cool-down:

Sellers whose homes have lingered on the market contemplate price reductions. Buyers resolve to get the house they want at their price, happy to be free of the frenzied market of six months ago.

As fall began, the wobbling stock market squelched much of the frantic sales activity of last spring and summer, said Leslie Appleton-Young, chief economist for the California Assn. of Realtors.

"In general you have a little more uncertainty injected into the marketplace," she said, and that has lessened buyers' urgency.

Home sales in Los Angeles and Orange counties dropped 2.5% and 6.25% in October, respectively, compared to the same period last year, although median home prices rose, according to Acxiom / DataQuick, a La Jolla-based real estate information company.

But October sales in San Bernardino, Ventura and especially Riverside counties are stronger than last year, a trend consistent with experts' observations that the current recovery began with the high-end homes in coastal markets before sweeping into inland areas.

Bob Bray of the Meyers Group, consultants to home builders, said new home sales in Southern California have slipped compared to earlier this year and last fall.

"There are still a lot of buyers out there, but they're being more cautious," Bray said.

Although a market slowdown is typical for the holiday period, experts agree that the autumn lull is a correction of the frenetic first half of the year. Early 1999 is expected to be robust.

Analyst John Karevoll of Acxiom / DataQuick said that even with the cool-off, "we're still at the strongest level of the decade, no matter how you gauge it."

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