HOME PRICES, AFFORDABILITY CLASH IN STATE.

Byline: Gregory J. Wilcox Daily News Staff Writer

Illustrating the yin and yang of California's real estate market, home sales and prices keep climbing but the state's major cities, especially Los Angeles, remain among the nation's most expensive places to live.

So concludes two studies released Thursday that reinforce what has become a familiar theme: The state is an expensive place to buy a home or rent an apartment and, with demand rising more quickly than supply, that won't change any time soon.

Last month, the number of home sales in the state jumped 19.4 percent from the May 1997 level while the median price, the point at which half the homes sold for more and half for less, jumped 10.5 percent, said the California Association of Realtors.

It means that if sales proceeded at May's clip throughout the year, escrow would close on 646,470 single-family homes. Sales increased 6.6 percent on a month-to-month basis.

Last month's median price was $204,440, up from $185,010 in May 1997.

Most local markets reflected the statewide trend.

In Los Angeles, the median price last month was $186,580, up 7.9 percent, while sales increased 16.6 percent. In Ventura County, the median price was $239,230, up 11.5 percent, while sales increased 30.4 percent.

``The economic renaissance which has been going full force in Northern California is now boosting nearly every area of the state,'' said Leslie Appleton-Young, the association's vice president and chief economist.

But for every upside there is a downside.

For example, at the current sales rate it would take 4.4 months to deplete the supply of homes on the market compared with 6.9 months a year ago. That kind of statistic eventually could act as a brake on sales, and a short supply tends to drive up prices.

``It will continue to put pressure on housing prices,'' Appleton-Young said of the shortage.

Prices in Los Angeles have always been high compared to most of the nation's other metropolitan regions, which makes this one of the least affordable places to live.

This year, as it did in 1997, Los Angeles ranked 73rd among metropolitan areas for housing affordability, according to Ernst & Young Kenneth Leventhal. Only New York and San Francisco were more expensive, the study said.

That means that in Los Angeles, where the median income for the family of a midlevel executive was $49,800, owning a home or renting an apartment chewed up 37 percent of the family's income.

For inexpensive housing, head for Oklahoma City, the most affordable place to live, according to the study.

Locally, the housing market isn't expected to get any more affordable, said Alan Horwitz, an audit partner at Leventhal's Los Angeles real estate group.

``With the increase in jobs and the increase in demand for housing . . . and the lack of land (to build on) you will have continued price appreciation,'' he said. ``And an increase in the cost of owning a home.''

Ted Gibson, chief economist for the California Department of Finance, said that since the state's population is expected to hit 50 million by 2020, up to 250,000 new housing units - single-family homes, condominiums and apartments - should be built annually to accommodate that growth.

Currently, about 120,000 units are built annually, he said.

``You do have to take into account we've just had one of the wettest winters on record. But the market is telling us that people are out there buying and there is a developing shortage of product,'' he said.

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Chart: HOUSING COSTS LEAVE LITTLE INCOME

SOURCE: Ernst & Young Kenneth Levanthal

Bradford Mar/Daily News