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Home Prices Statewide at Record Level

As the median price of housing reaches $424,000 in April, prospective buyers are advised to 'go east.'

June 13, 2005|Daryl Kelley and Daniel Yi | Times Staff Writers

TEHACHAPI, Calif. — Last June, a window of opportunity opened for David and Lilliana Valdez. And the Burbank couple wiggled through, buying their first home, a roomy two-story house in this mountain town for $276,000.

A few months later, the same model sold for $362,000. Now, across quiet Green Street, an owner is selling a similar home for $420,000.

"We were lucky," said Lilliana, 32, a mother of five whose husband commutes nearly two hours to a warehouse manager's job in Chatsworth every morning. "I don't know if we'd still be able to afford it."

In California's scorching housing market, the priciest in the nation, affordable homes for families like the Valdezes are moving out of reach. In some far-flung outposts that for years beckoned cash-strapped buyers, the cost of typical dwellings has nearly doubled in the last year.

The statewide median price of houses and condominiums -- the point at which half sell for more and half for less -- reached $424,000 in April, up $63,000 in 12 months, according to DataQuick Information Systems.

A year ago, renters looking to buy could afford the commuter towns of Southern California's wind-blown deserts. Or, job permitting, they could migrate to the cheaper markets of the Central Valley or the state's rural eastern and northern flanks.

Buyers continue to migrate to those areas but, on the whole, "affordable housing is disappearing in California," said Leslie Appleton-Young, chief economist for the California Assn. of Realtors. "You're constantly playing catch-up with the escalating prices."

Her advice hasn't changed. "My recommendation is the same as last year: Go east," Appleton-Young said. "Buyers need to go inland or buy a condominium or double up with another professional single person. They need to be very creative and flexible."

But housing away from the pricey coastal zones isn't the bargain it used to be.

In the Inland Empire, soaring real estate prices are chipping away at the region's long-standing reputation as a haven of affordable housing. House and condo prices shot up about $79,000 in a year, reaching a median price of $290,000 in San Bernardino County and $370,000 in Riverside County during the first quarter of 2005.

In the last five years, the share of households in San Bernardino and Riverside counties that could afford a median-priced home plunged from one-half to one-fifth, according to the Realtors association. The search for cheaper land is pushing the boundaries of Southern California's suburbs to once-unimaginable limits.

Developers and buyers are venturing well beyond communities such as Victorville and Apple Valley, in San Bernardino's High Desert area, and Beaumont and Banning, gateway towns to Riverside County's Coachella Valley.

"I used to joke that one day people will commute to [and from] Barstow," said John Husing, an Inland Empire economist and consultant. "It is no longer a joke."

"The L.A. Basin has moved out here," said Willy Olsen, a land broker in Hesperia, 35 miles north of San Bernardino. "Local commuters drive to Rancho Cucamonga, Fontana, Ontario, and some even drive to Los Angeles."

Even out there, the buyer's dollar doesn't go nearly as far as it used to. In the last eight months, Olsen said, the price of an undeveloped acre of desert near town has doubled to $35,000, and some prime lots in Hesperia are going for $75,000. Houses that were selling for a median price of $168,000 a year ago now cost $275,000.

Some say the spiraling costs cannot be measured purely in dollars. The outward push taxes everyone's quality of life, adding cars to the road and pollutants to the air. Those who can't afford to move are crowding older neighborhoods in Ontario and Riverside, among others, sometimes packing two to three families in a single-family home.

"The housing market is broken," said Sam Mistrano, deputy director of Southern California Assn. of Non-Profit Housing. "The starter homes are not happening at all in the Inland Empire. They look like starter homes, but they go for $400,000. They are only affordable in relation to the outrageous prices in Los Angeles and Orange County."

In many ways, the cycle is predictable, Husing said, having repeated itself since World War II: People move to undeveloped areas, industry and services follow, property values rise and people move farther out. In the 1980s, for instance, an unprecedented influx of families from the coastal counties jolted once-sleepy communities from Rancho Cucamonga and Corona to Redlands and Moreno Valley.

"It will happen as long as you have population growth," Husing said. "What has happened in the last few years is that the move has shifted to the deserts because that's where the land is."

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