Palmdale-Lancaster home values are nose-diving; area sees sharper drop than anywhere else in county.

The Palmdale-Lancaster housing market, which underwent skyrocketing growth in the late 1980s, is now in a steeper nose dive than any other housing market in Los Angeles County, according to a semi-annual survey of single-family detached homes.

Since April 1990, home values in the Palmdale-Lancaster market have fallen 17.9 percent, more than any other area in L.A. County, according to the most recent quarterly report of the Real Estate Research Council of Southern California, released Dec. 2.

The council based its figures on a sample of 308 homes, which were selected by local appraisers to be representative of the entire Southern California housing market. Twice each year -- in April and October -- a formal appraisal is made of each of the sample homes.

The second-largest value drop has taken place in the Westside-Santa Monica market, where surveyed home values have fallen 15.6 percent since 1990.

The recent statistics show that the recession has not been discriminating; it has hit both low-priced markets, such as Palmdale-Lancaster, and high-priced markets, such as Westside-Santa Monica.

According to the survey, the average home value in Westside-Santa Monica dropped from $813,633 in April 1990 to $662,133 in October 1992. The average value in Palmdale-Lancaster fell from $160,179 in April 1990 to $131,000 in October 1992.

TRW-REDI Property Data, a Riverside-based real estate information company, concurred with the council's survey conclusions that home values in Palmdale-Lancaster have suffered significant drops. TRW-REDI figures, based on recorded grant deeds and trust deeds of all homes sold in L.A. County, showed that the average home sales price in Palmdale dropped from $148,625 in June 1990 to $131,525 in June 1992. In Lancaster, the average home price dropped from $126,032 in June 1990 to $106,370 in June 1992.

Real estate experts said the reasons for the drops in Westside home prices are somewhat different than the reasons for Palmdale-Lancaster's drops. Westside home prices increased very rapidly in the 1980s, meaning those over-inflated prices now have further to fall to reach actual market value, real estate experts said.

Meanwhile, in Palmdale-Lancaster, demand for homes over $160,000 is dead; all the activity there has been in lower-priced homes. And that low-end concentration has caused the average home price to tumble.

The Antelope Valley area, where Palmdale-Lancaster is situated, has long been considered one of L.A. County's most-affordable markets for single-family homes. Real estate prices there have been through great ups and downs in past years. During the big run-up in home prices between 1988 and 1990 -- when home prices increased upwards of 50 percent -- builders flocked to the Antelope Valley and glutted the area with homes. The market is still suffering the effects of that glut. In fact, the inventory of new homes unsold in the Antelope Valley and adjacent Santa Clarita Valley accounted for 72 percent of all new homes for sale in L.A. County, according to the Real Estate Research Council's Dec. 2 report.

The sizable surplus of new homes on the market in those high desert valleys, the high number of foreclosures there and the expansive amount of available land are expected to keep high desert home prices sluggish for quite some time, said Michael Carney, executive director of the Real Estate Research Council and a professor at California State Polytechnic University, Pomona.

Carney said, in the long run, builders' continuing difficulty with obtaining financing for new tract-home construction could eventually help stabilize the deteriorating Antelope Valley housing market.

Jeff Meyers, president of the Meyers Group, a real estate consulting firm with five offices in the L.A. Basin, said Antelope Valley home prices have already undergone their most severe drops. They will only drop another 5 percent, at most, before stabilizing, Meyers predicted. But even then, prices there will not increase significantly for years.

"Right now home prices in the Antelope Valley are bouncing along the bottom and there shouldn't be dramatic increases in prices for some time," he said.

Meyers said the $80,000-to-$130,000 housing sector is relatively active in the Antelope Valley, which is prompting developers to concentrate heavily on that sector. In fact, a number of large-scale housing developments that were foreclosed on in the Antelope Valley are now likely to be reconfigured for lower-end homes, Meyers said.

Apparently trying to put the Southland's housing slump in the best possible light, Meyers said currently there is a only a three-month supply of single-family homes priced under $100,000 in the six-county region of Southern California. However, that sector only comprises a small fraction of the Southland's overall housing market, and a three-month supply in that sector is not any lower than historical inventory levels.

Meyer said the first-time buyer market of homes priced between $80,000 and $120,000 has remained stable.

Despite the housing glut in the Antelope Valley, a number of real estate professionals with stakes in the area continue their enthusiastic boosterism.

A spokeswoman from Kaufman & Broad Home Corp., the L.A.-based home builder, said the company is "meeting and exceeding goals" in the Antelope Valley, with most of the sales to first-time buyers.

Chuck Tyler, manager at the real estate office of Re/Max All-Pro in Lancaster, said his office ranked No. 1 in sales in October among the company's estimated 250 offices throughout the state.

He said the drop in housing prices is "just the market readjusting itself and bringing prices back in line with what 'normal' appreciations should be."