Home Prices in Southland Up 0.6% in 1996

After spiraling down for most of the decade, Southern California home prices rose last year for the first time since 1991 as the region slowly recovered from a devastating real estate bust.

The increase reported Friday by a real estate research firm is another strong signal that Southern California property values have stabilized in general and are expected to continue to improve this year--albeit at a modest pace. Los Angeles County home values, for example, are expected to rise 1.6% this year, according to a separate forecast by Chapman University, which compiles one of the few comprehensive economic forecasts for Los Angeles County.

“The buyers are cautious, but demand is out there and there is not much supply,” said real estate brokerage owner Fred Sands.

The median price for all homes sold in Southern California last year, including condominiums, rose 0.6% from 1995, to $161,000, according to DataQuick Information Systems, a La Jolla-based real estate research firm.

That increase is tiny, but stands in contrast to a string of annual losses that have dragged down the regional median price by nearly 12% since 1991, according to DataQuick. Many neighborhoods have suffered much steeper losses that have, in some cases, cut real estate prices in half since the booming market of the late 1980s.

The number of homes sold last year also rose, up 15.1% from the depressed levels of 1995, to 216,588. In December alone, the number of homes sold jumped 10.3% to 19,202 properties.

Prices ended the year on a strong note too, with December’s median sales price for Southern California rising 3.1% from year-ago levels, to $164,000.

After remaining sluggish through most of the year, sales of new homes jumped up 20.5% in December as the median price for new homes that month increased 9% to $206,000.

Real estate agents and local economists warn that the real estate recovery remains highly uneven, with many neighborhoods still suffering from falling prices. Last year, for example, Ventura County lead the region with a 2.4% gain in the median price, to $169,000, and San Bernardino suffered the biggest decline--1.7%--to $119,000.

In Los Angeles County, the median sales price remained steady at $162,000, but dipped 0.5% in Orange County to $192,000.

Broker Sands says he has seen prices improve strongly on the Westside of Los Angeles. However, in the Inland Empire, where his firm has held auctions of foreclosed homes, prices have continued to sag in many areas. Still, Sands expects home values to continue rising overall.

In Orange County, many home sellers were happy their losses were not as big as they had feared, according to Irvine real estate agent Jeanne LaFourcade. One couple in Tustin Ranch sold their four-bedroom home for $425,000, about $35,000 below what they had paid for it. But a year earlier, a similar home in the same gated community sold for under $397,000.

“Buyers are still pretty selective and they had a lot to choose from,” said LaFourcade.

In the West Adams neighborhood of Los Angeles, real estate agent David Raposa said sales in that inner-city neighborhood near USC have benefited from an increase in the city’s economy and a decrease in social and racial tensions. One $320,000 Craftsman home that would have sat unsold for months in previous years sold in a matter of weeks, said Raposa.

“They [customers] feel more confident in general about Los Angeles, and that has had a big impact on the market,” said Raposa.

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Home Sales Rise

Home sales and prices in Southern California rose last year. The price gain ended a lengthy erosion in home values.

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Homes Homes Median Median sold sold price price 1995 1996 % 1995 1996 % County (thousands) (thous.) change (thous.) (thous.) change Los Angeles 77.5 86.5 +11.7% $162 $162 +0.0% Orange County 30.7 36.5 +18.7 193 192 -0.5 San Diego 28.1 33.5 +19.2 165 169 +2.4 Riverside 21.3 25.5 +19.6 126 126 +0.0 San Bernardino 20.8 23.8 +14.4 121 119 -1.7 Ventura 9.6 10.7 +11.1 188 192 +2.1 So. California 188.1 216.6 +15.1 160 161 +0.6

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