BUSINESS 2004: HOME PRICES KEPT GOING UP AND UP BIGGER INVENTORY GIVES BUYERS BREATHING ROOM.

Byline: Gregory J. Wilcox  Staff Writer

Someone always buys at a market's peak.

For the San Fernando Valley's residential real estate market, that might be anyone who bought a home in June priced at the record median of $505,000, the first time the half-million-dollar threshold has been crossed. And if the sellers had bought that house in June 2003 for $373,500, they could have made $131,000 on the investment.

That's also when the market shifted a bit back toward buyers.

For months on end, sellers had imposed their will on the market, bringing into play a price-to-fantasy ratio that put pressure on buyers. With supplies at record lows, buyers that showed any hesitation were shut out.

And price appreciation turned torrid during the first half of the year as inventory dwindled.

Experts, though, said change was coming. In the past when the median price crossed the $200,000, $300,000 and $400,000 level, it retreated back and bounced under it for a while before making another big move.

Buyers needed time to get used to a new economic reality.

``I fully expect that will be the pattern this time around,'' Jim Link, the executive vice president of the Van Nuys-based Southland Association of Realtors, said at the time.

He was right, too.

In July the median price, the point at which half the homes sell for more and half for less, slid to $489,000. Then in August it fell to $485,000, climbed to $490,000 in September and back down to $471,500 in October.

But October's median was still up $76,500 from a year ago.

Prices are softening in reaction to June's record price, which prompted a surge in inventory as owners tried to capture the peak.

Single-family home sales remained strong this year - buyers bought more than 1,000 of these properties every month from March through October and there's a good chance that's how the year will end.

But with more properties for sale, buyers can take their time and that could mean it will take a while for prices to again cross into record territory.

However, the consensus of market watchers is that a scenario where prices fall under year-ago levels is not on the horizon.

``The market clearly has shifted,'' Lynn Rinker, the association's president, said of the October results. ``When it was rising rapidly, some people were waiting to see if the new price levels would hold. Now that the market has taken a pause, other buyers are waiting to see if activity will slow down.''

It may take until June 2005 to see if this market's price peak has, in fact, been reached.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com

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Drawing:

(color) no caption (Homes for sale, real estate agent)

Jorge Irribarren/Staff Artist