HOT HOME SALES PACE COOLING, REALTORS SAY.

Byline: Gregory J. Wilcox Daily News Staff Writer

Buoyed by a strong economy brimming with confident consumers, the San Fernando Valley area's real estate market in 1998 caught a $4 billion wave that seems ready to break, a trade group said Monday.

But it won't be an ugly wipeout like the one that occurred in the early 1990s.

Last year, sales of single-family homes jumped 14.7 percent to 13,242 units from the 1997 level, said the Southland Regional Association of Realtors. And the median housing price, the point at which half the homes sold for more and half for less, soared 14.6 percent to $190,117, a gain of $24,284 from last year.

That's the largest volume since 15,263 units sold in 1988 and prices increased the most since the median skyrocketed $41,250 in 1989. Including condominiums, Realtors sold $4 billion worth of properties in the Valley last year, the trade group said.

In the smaller but red-hot Santa Clarita Valley market, sales of both single-family homes and condominiums soared 33 percent to 3,594 properties. The median single-family home price was $204,575, up about 13 percent from 1997.

Realtors said 1998's pace, fueled in part by low interest rates, could be hard to maintain. So this year's sales total could end up looking a lot like 1998's, with little or no percentage increase.

``I think it will be a little flatter,'' Jim Link, the association's executive vice president, said of the 1999 market. ``My best guess is that sales will run about the same or maybe a little less.''

Nima Nattagh, an analyst at First American Real Estate Solutions in Santa Ana, said that while this year will bring a slowdown compared to 1998, it will remain a strong market nonetheless with prices appreciating in the 5 percent to 6 percent range. Any sales increase would be slight.

Interest rates, though, continue to remain favorable and inflation is in check.

``The interest-rate environment is one of the things that will remain favorable for the housing market and there is no suggesting they will go up anytime soon,'' Nattagh said.

Last year's sales could have been even higher had there been more properties on the market, said Beth L. Sommer, president of the Valley's Realtors.

``Sales have been on a steady climb for the last six years, yet no one fully predicted last year's incredible activity,'' she said.

Signs of the kind of year that may be in the offing arrived during December.

Last month, escrow closed on 1,015 single-family homes, down 12 percent from a year ago, while the median price climbed to $198,500, up 17.5 percent.

At the same time, Realtors sold 270 condominiums, a 10.2 percent dip from December 1997. The median price jumped 19.5 percent to $119.500.

While the dip is seasonal, it was the first time in 19 months that single-family home sales fell from the year-ago level.

Meanwhile, pending sales of both single-family homes and condominiums, a leading indicator of what the months ahead will bring, fell for the third consecutive month on an annual basis.

And the market dynamics are changing.

Sales increases during the past several years have been fueled by first-time buyers snapping up properties at the low end of the price scale. Last year saw sales gains across all price points, Sommer said.

Even though the volume of sales could slow, homeowners should continue building equity.

When the real estate market collapsed during the early and mid-1990s, home prices lost about 25 percent of their value. Link estimated that up to 70 percent of that lost equity has been recaptured in some cases.

More ground should be gained this year, he said, but not as much as in 1998.

CAPTION(S):

chart

Chart: Strong year

The sales volume and median price of homes sold in the San Fernando Valley in 1998 were the best in years.

Bradford Mar/Daily News