HOME PRICE HIGH AS HILLS REALITY OUTCLIMBED YEAR-AGO FORECASTS.

Byline: -Gregory J. Wilcox

This will likely be the year when the typical home in San Fernando Valley neighborhoods costs half a million bucks.- The Good Life, 2005

Turns out that was a conservative expectation.

The median price of a previously owned single-family house in the San Fernando Valley started last year at $521,000 and in the ensuing 12 months gained $84,000, or 16.1 percent, to reach $605,000.

That's a level that was practically unfathomable when this millennium started. And a typical condominium now costs as much as or more than a house did several years ago.

But there is one big difference between then and now.

This year began with sales falling an annual 31.6 percent to their lowest level since 1997.

That's causing market watchers to expect price increases to temper in 2006. But the situation is still not all that good for house hunters hoping for a great buying opportunity, even though sellers now need to be more realistic in setting their sales price.

``We don't really see the median coming down. If we had a really depressed market, you could see the median start coming down, and I just don't think that's going to happen,'' said Jim Link, executive vice president of the Van Nuys-based Southland Regional Association of Realtors.

Neither does Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. Prices will likely move sideways, with appreciation rates finally retreating into the single-digit range by summer.

It's definitely a residential real estate market in transition, and the move is from strong to normal.

The market did collapse in the early 1990s, but that was in response to an economic meltdown that resulted in 700,000 job losses across Los Angeles and Orange counties, many of them in the once-powerful aerospace sector.

And the Valley was heavily invested in that industry.

Kyser and others note that the economy is growing now and, in the Valley, is more broad-based than in the past.

``Now you could add in international trade and a non-defense-related tech industry that is growing very rapidly,'' Kyser said.

And while inventory is now building toward a normal level, housing demand remains strong.

Among the negatives: Interest rates are on the rise, and first-time buyers are having to stretch their finances as never before.

Before this year started, 2006 was expected to be a year in which there will be fewer single-family house sales than the 12,786 in 2005 - which were the fourth-highest total since 1988.

And even if this year ends up with a sales total similar to the 11,545 in 1997, it will still be a pretty good year.

Daily News real estate Web address: dailynews.com/homes/

San Fernando Valley

Homeownership rate: 49.5 percent#

Median resale home price: $605,000*

Housing authorities: The Housing Authority of the city of Los Angeles, [phone], www.hacla.org; Los Angeles County Community Development Commission, [phone], www.lacdc.org

Glendale

Homeownership rate: 38.4 percent

Median resale home price: $732,000*

Housing authority: Glendale Community Development and Housing, [phone]

Burbank

Homeownership rate: 43.5 percent

Median resale home price: $610,000*

Housing authority: Burbank Housing Authority, [phone]

SOURCE: 2000 Census, San Fernando Valley Economic Research Center, DataQuick Information Systems*December, 2005

-Daily News

CAPTION(S):

2 photos, box

Photo:

(1 -- color) Home prices are generally higher than the Valley's median

in Calabasas, where this 110-house development, Mont Calabasas, is located.

Tina Burch/Staff Photographer

(2 -- color) no caption (homes)

Box:

Daily News real estate Web address: dailynews.com/homes/ (see text)