HOME IMPROVEMENT; REALTY ACTIVITY BEST OF DECADE.

Byline: Dave McNary Daily News Staff Writer

It's official - the San Fernando Valley's massive real estate nightmare is over.

The market posted its best year of the decade in 1997 with increases in prices and sales volume for the first time since 1988, according to figures released Monday by the Southland Regional Association of Realtors.

Closed escrows in 1997 for single-family homes jumped 10 percent to 11,545, the average resale price rose 3.9 percent to $225,867 and the median price gained 3.4 percent to $165,833.

The association also reported that 1997 concluded with a stunning month: December's sales volume of 1,152 single-family homes was the highest level since July 1989. The activity was up more than 32 percent over December 1996.

Additionally, condo sales for December hit 304, a surge of 16 percent from 1996. It was only the third time since 1991 that monthly Valley condo sales had topped the 300 figure.

An improving housing market also was reported in the Santa Clarita and Antelope valleys as well as in Ventura County.

The Southland association expects more of the same this year with sales and prices for all homes in the San Fernando Valley likely to post gains of at least 5 percent over 1997.

``Properties that are in good condition and properly priced are selling right away,'' said Bud Mauro, president of the association. ``There's still a lot of pent-up demand and with employment up, people want to get into homes.''

Even with the 1997 increase, the average price for single-family homes sold in the region is still about 24 percent below the average figure for 1990. ``We still have a way to get back to where we were,'' said Jim Link, vice president of the trade group.

At its lowest point in 1992, Valley home sales activity plunged to 7,774 closed escrows for single-family homes - less than half the number of transactions four years earlier.

Still, the report underscores the fact that the Valley's economy is no longer in a downward spiral.

``You have to say that the region's residential market has definitely turned the corner,'' said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. ``After you got hit by the aerospace downsizing and the Northridge Earthquake in 1994, you've come through it.''

Leslie Appleton-Young, senior economist for the California Association of Realtors, said the Valley's recovery is critical for the state. The region's problems helped keep California mired in recession through 1995.

``The Valley numbers are indicative of how much the Southern California economy has rebuilt itself from recovery into health,'' she said. ``If the Valley is doing well, it's a very good sign for the rest of Los Angeles County.''

Entry-level activity

Mauro noted that activity has been concentrated at entry-level homes but said pricier properties have been starting to move during the past year.

``The resurgence of the trade-up market is being fueled by renewed economic activity throughout the region and many buyers are returning to the Valley from the outlying areas so they can live closer to their job,'' he said.

The positive numbers are significant since real estate turned the Valley into America's most affluent major suburb in the 1970s and '80s but also helped push it deep into recession in the early '90s.

Entry-level buyers helped stop the region's housing market slide in 1996 and the recovery began accelerating last year as more expensive properties began to sell.

``Prior to the recession, the Valley had been a big trade-up market, so the renewed activity is very significant,'' Link said. ``The entry-level market has been carrying the market since the start of 1996 but in the spring and summer of 1997, we started seeing more in the average and above.''

Link also pointed out that pending escrows during December - traditionally among the slowest months for buying and selling - had nearly doubled last month compared to December 1996, rising to 1,084 from 578. ``That's a good indicator that the market's a lot stronger than it was a year ago,'' he said.

Mauro said the lowest interest rates in two decades has been a key factor in turning the region's market around. ``People are realizing that the market for buyers is not going to get much better than it is right now,'' he said. ``Now is the time to buy.''

Not like the old days

None of the experts was ready to proclaim Monday that the Valley has made a complete recovery to the golden days of the late 1980s, when speculative fever pushed the average resale price to near $300,000.

Nima Nattaugh, an economist with real estate information tracker Experian, noted that last year's price gain in the Valley represented the first since 1990.

``The recent value increases have been fairly nominal, matching inflation, but the caveat is that someone who bought in 1991 would have suffered an equity loss of 25 percent,'' Nattaugh said. ``The recovery is going to be a protracted process that won't resemble anything like the late 1980s. It will take at least four or five years for people to recoup the losses.''

Kyser said the Valley's recovery is being fueled by the diversification of the job base, with major gains coming in such areas as high-tech, entertainment and financial services. The improved job picture will lead to more activity in the trade-up market, particularly from the people moving into the area and the Latino middle class.

Appleton-Young has predicted that statewide resale activity will rise 5 percent this year amid a decline in interest rates. ``There should definitely be a continuation of the momentum in the Valley,'' she added.

Nearby markets also have brightened outlooks. For example:

Single-family home sales in the county during the first 11 months of last year were up 14.3 percent with a 14 percent gain in median price.

The Ventura County Coastal Association of Realtors reported two signs of an improved market - a 13.6 percent gain in median prices between December 1996 to December 1997 to $192,000 and a 20 percent decline in the time houses stay on the market to 89 days. House sales in the west county region dropped 9 percent to 214.

The San Fernando Association of Realtors, which tracks Santa Clarita Valley home sales, said escrow closed in December on 247 homes, making the traditionally slow holiday time the third busiest month of 1997.

``This is usually the slowest time of year, but we've been extremely busy,'' said Bob Keller of Prudential Success Realty in Canyon Country.

Phil Garcia, an agent with Coldwell Banker Vista Realty in Valencia, said Santa Clarita real estate agents expect a prosperous 1998.

``Right now it's very exciting. Over the last two months we've been getting three and four offers for a lot of the same properties,'' Garcia said.

In the Antelope Valley, where the late '80s boom collapsed in the 1990s amid big drops in home values and record numbers of foreclosures, things are also looking up.

``In the last six months of 1997 we started to turn the corner,'' said Lou Bozigian, co-owner of Fred Sands Mid-Valley Realty in Lancaster. ``If we can get 1 percent or 2 percent appreciation it shows we're on the road to recovery and on a positive cycle.''

There is a good demand for larger homes in the Antelope Valley, but the market for low-end houses has bottomed out after being saturated by foreclosed properties, Bozigian said. ``We're the last part of the wave,'' he said. ``Most of the rest of the state is doing quite well.''

Daily News Staff Writers Stacy Brown and Jim Skeen contributed to this report.

CAPTION(S):

photo, 2 charts

Photo/ chart: (color) no caption (`For sale' sign in front of house)

Daily News

Chart: (1) Home sales

(2) Home prices

SOURCE: Southland Regional Association of Realtors