RECORD PACE FOR HOMES; ECONOMY BOOSTING SALES, PRICES.

Byline: Gregory J. Wilcox Daily News Staff Writer

Low mortgage rates and a vibrant economy propelled California's home sales and prices to record levels during July, a trade group reported Tuesday.

Statewide sales of existing homes soared 20.3 percent last month from the year-ago level and the median price hit $211,780, up 11 percent from July 1997, said the California Association of Realtors. That's $780 higher than the previous record set in May 1991.

As for sales volume, if home sales for the last five months of the year proceed at July's pace, escrow would close on 677,110 homes. That would surpass the record 604,950 homes sold during 1978, the group said.

Los Angeles County turned in an especially strong showing during July, with sales jumping 20 percent from a year ago and the median price - the point at which half the homes sold for more and half for less - making a leap of 16 percent, to $204,570. The median price, though is still well below the high of $229,260 reached in May 1991.

Home sales and price data were compiled from a survey of 90 real estate associations across the state.

Economists and analysts concurred that Tuesday's report shows that a combination of attractive interest rates, a robust economy and gains in personal income are fueling the home-buying spree.

``Interest rates are low and prices are going up so people seem more comfortable about making an investment. And the economy is still very strong despite the storm clouds that are gathering because of the Asian crisis,'' said G.U. Krueger, deputy chief economist for the Realtor's group.

For example, 30-year fixed mortgage interest rates averaged 6.95 percent during July 1998, down from 7.47 percent in July 1997, according to the Federal Home Loan Mortgage Corp. Adjustable mortgage interest rates averaged 5.63 percent in July 1998, up slightly from 5.56 percent in July 1997.

Further evidence of a robust housing market: Homes are staying on the market for a shorter period of time this year; 37 days vs. 47 days in July 1997.

At the same time, the association's unsold inventory index for single-family homes last month was just 4.2 months, down from 6.7 months for the same period a year ago. July marked the first time since the summer of 1988 that the index, which indicates the number of months needed to sell off the available housing supply, has fallen below five months.

``It doesn't surprise me at all that home sales are way up,'' said Michael Carney, executive director of the Real Estate Research Council at California State Polytechnic University, Pomona.

He said that year-over-year sales gains could range from 20 percent to 30 percent in various markets across the state.

``We've had some nine years' worth of extremely slow real estate activity. California has lagged the nation so part of this is catch-up. And prices have clearly turned around,'' he said.

Among the 10 communities with the biggest gains in the median price were Sherman Oaks and Sylmar. The median price in Sherman Oaks last month was $286,000, up 36.8 percent. It was $131,250 in Sylmar, up 35.2 percent.

Analysts don't put much emphasis on these kinds of percentage gains though because of the small sample size.

Bruce Smith, an economist at the California Department of Finance, said the Asian financial crisis' potential impact on California might make it hard to keep sales this high but that demand for housing will continue to drive prices up.

``We're in our second year of very large real income increases,'' Smith said. ``Consumers are confident and pent-up demand is there.''