Bargain hunters were out in force in the San Fernando Valley real estate market in October, snapping up more properties than in any other October during the decade, but focusing largely on condos and more affordable single-family homes, experts said Monday.
The single-family sales total was up only 1.5% from October of 1998, but still represented the highest October tally since 1988. And condos gained a whopping 45.5% over the October 1998 sales total, posting the highest October since 1989, according to a report from the Southland Regional Assn. of Realtors.
But while sales were unusually brisk, single-family home prices retreated, dropping nearly 9% from September's $225,000--a figure that represented the highest Valley home value since April of 1992, the report said.
The October drop, to a median of $205,000, was seen by analysts as a seasonal fluctuation and an indication that the mix of homes sold last month contained more properties at the more modest end of the scale. Even with the dip, the figure remained nearly 7% higher than the October 1998 figure.
"The [monthly] decline in the median is mostly just a shift in the market mix, away from the summer home-buyer profile, which would include families with kids," said John Karevoll, an analyst with La Jolla-based Axciom/DataQuick, which monitors real estate activity nationwide.
"In the summer, families with school-age kids, they just roar out there and take over the market. It's a siege," he said jokingly. "People who have kids generally try to sell and buy during the summer, so they dominate the market and pay slightly more for their homes than they would if they purchased in November or February."
During the fall and winter, he said, the market has a greater mix of empty nesters, young couples and bargain-hunting investors looking to latch onto Valley properties before they move out of reach.
The median price of a single-family home in the Valley is up nearly 8% over levels seen at the beginning of the year, which is right in line with Los Angeles County as a whole, according to Karevoll.
"Prices are going up 7% to 9% per year, and that's a very sustainable number," he said. "It doesn't indicate there's any frenzy out there, and it doesn't indicate there's any drop-off out there."
Unlike some areas on the Westside and the coast, the Valley remains about 16% below the region's all-time high of $245,000, set in 1989.
But overall, according to figures from Axciom/DataQuick, the broader Valley region (including Glendale and Burbank) boasts higher median prices than the county as a whole.
Counting all sales, not just those involving real estate professionals, the median price for single family homes in the Valley region was $200,000 in the second quarter of this year, compared with $175,000 for the county. Figures from First American Real Estate Solutions pointed to a similar pattern.
Some real estate analysts were somewhat startled by the October sales figures, anticipating more of a tapering off due to seasonal factors and rising interest rates.
"What I'm more surprised by is the relatively strong pending sales and sales activity," said G.U. Krueger, deputy chief economist for the California Assn. of Realtors. "I was expecting more of a slowdown and that has not occurred. "
More than 1,050 single-family homes and 374 condominiums changed hands during the month, an unusually high level of activity.
"The year-over-year figures indicate that the health of the resale market in the San Fernando Valley continues to be surprisingly strong, despite increases in interest rates," Krueger said.
As it has for most of the year, the entertainment-heavy southeast quadrant led all areas of the Valley in terms of the number of single-family homes sold, but the southwest sector, which includes Woodland Hills, West Hills and Calabasas, remains the undisputed price king, with homes selling for an average of $335,700.
While the region's inventory of homes remains somewhat tight, Karevoll predicted that the continued upward motion of prices will lure more sellers into the pool.
"There are still a lot of people who wanted to sell in '92, '94, '96," said Karevoll. "Now they can sell and walk away with enough money to buy something else. We see a stable level of properties coming into the market."
The increased activity in the condo market already has spurred more owners to test the waters. While the inventory of single-family homes on the market fell by 12% compared with October 1998, the condo inventory rose by 7%.
"The overall market picture right now is of incredible strength and breadth," said Karevoll, speaking of the county housing market. "The activity we're seeing now is strong in all categories, from entry-level up to prestige."