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Valley Median Housing Price Dips Nearly 2% in July

Real estate: Trade groups concede that the local market is softening slightly, but they say year-over-year gains show the market overall remains strong.

August 08, 2000|KAREN ROBINSON-JACOBS | TIMES STAFF WRITER

Continuing a seesaw pattern, prices for condos and single-family homes in the San Fernando Valley slipped in July from June, though they remain solidly ahead of last year's figures.

The median price for a single-family home (the price at which half the homes sold for more and half for less) was $236,000 in July, according to figures released Monday by a real estate trade group. That was down nearly 2% from June, but was up more than 8% compared with June 1999.

While the median price was the highest for a July since 1989, it was the lowest monthly figure this year since March, and called into further question whether the year 2000 will see the Valley regain the ground lost to the recession of the mid-'90s.

The all-time high for the region is $245,000, set in June 1989. When the median hit $240,000 in April, it appeared that the record was within reach, but the ensuing months have seen prices take a few steps forward, then a few steps back.

Median prices dropped to $239,000 in May, rose to $240,000 again in June, only to slide in July. The up-and-down pattern has been in place since last year, even though overall, prices have gained more ground than they have lost.

Officials with the Southland Regional Assn. of Realtors, which released the monthly report, and its sister organization, the California Assn. of Realtors, concede that the Valley market is softening somewhat, but they point to year-over-year gains as evidence that the market overall remains strong.

"You have had a lot of price pressures and that's got to start to have an impact on the market, and that's what you're seeing in these numbers," said Leslie Appleton-Young, vice president and chief economist for the California Assn. of Realtors. But she said she feels the Valley market is "unbelievably strong," pointing to the 6% hike in prices from the beginning of the year, and the 8.3% year-to-year gain.

"From $222,000 in January to $236,000, that's a pretty good uptick," she said.

She also noted that, according to association figures, Los Angeles County overall remains below its pre-recession high of $229,260, set in May 1991. So the Valley is in line with the rest of the county, she said.

Jim Link, executive vice president of the Southland group, said he thinks there is still a strong possibility that the Valley will hit the $245,000 mark this year, depending in large part on the strength of the market in August and September.

"I think we're going to come real close this year," he said.

"If we hit it, it'll be toward the end of the year and we will not surpass $245,000 by much if at all. It will hinge on the late-summer and early-fall markets."

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Perhaps, said Mitch Davis, president of the Southland association, things are settling into a "normal market," in which prices increase at an annual rate of about 4% to 5%, without "rising into the stratosphere."

Said Appleton-Young: "You have a somewhat less frenetic market, where people are willing to wait. The buyer is becoming more patient and savvy about value."

When would-be home buyers took a break, it helped push single-family home sales down 19.5% (1,051 sales in July compared with 1,306 in July 1999) and down 10.2% compared with June, when 1,171 single-family homes were sold.

July condo sales jumped 9.7% compared with last year (396 this July; 361 in 1999), but were down 8.3% compared with June's 432 sales.

July's sales tally for single-family homes was the lowest since February, traditionally one of the slowest months of the year. And it also was the lowest July since 1996, when the region was still in the grip of a punishing recession.

The market slowdown also could be seen in the Santa Clarita Valley, where 223 single-family homes were sold, down 18.9% from a year ago, and down 11.9% compared with June. The median price of $245,500 was up 7.7% compared with last year, and was up 2.2% from June.

In the Santa Clarita condo market, 124 units changed hands in July, a gain of 6% over July 1999, but down 16.8% from June. The median condo price was $135,500, on par with the July 1999 figure of $133,000, but down 3.1% from June's $139,900.

Even though the San Fernando Valley market appears to be taking a breather, Appleton-Young said signs indicate that the region may still hit the $245,000 mark toward year's end.

"I think it's possible, yes," she said. "Demand is still far in excess of the supply for housing, and inventory is at historically low levels. So I think it's possible, definitely later on this year.

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