SAGGING SALES, APPRECIATION PROOF HOUSING BOOM OVER.Byline: GREGORY J. WILCOX Staff Writer Over the summer, John Toole put his Woodland Hills home on the market for $1,695,000 and waited for a rush of prospective buyers. And waited, and waited and waited. So he offered a 15-day Hawaiian Islands cruise for two to the agent representing the buyer to stimulate some interest. And Toole waited some more. He eventually slashed slash v. slashed, slash·ing, slash·es v.tr. 1. To cut or form by cutting with forceful sweeping strokes: slash a path through the underbrush. 2. his asking price by $100,000. Nothing changed. ``It didn't bring anybody around. Nothing. The market is absolutely dead,'' Toole said. ``I was amazed a·maze v. a·mazed, a·maz·ing, a·maz·es v.tr. 1. To affect with great wonder; astonish. See Synonyms at surprise. 2. Obsolete To bewilder; perplex. v.intr. .'' He's taking the house off the market when the listing contract expires next month. Toole's experience, sagging sag v. sagged, sag·ging, sags v.intr. 1. To sink, droop, or settle from pressure or weight. 2. sales and scant scant adj. scant·er, scant·est 1. Barely sufficient: paid scant attention to the lecture. 2. Falling short of a specific measure: a scant cup of sugar. year-over-year price appreciation offer proof that the boom market of the late 1990s and first half of this decade is over. The number of ``For Sale'' signs across the San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. soared earlier this year and many now feature ``Price Reduced'' banners. Monthly sales of houses and condominiums have been consistently about 20 percent below their 2005 levels, and prices are now increasing by the smallest amount in years. Home sales counts have totaled fewer than 1,000 units every month since October 2005. And the year is expected to end that way for the first time since 1996. And while the median home price -- the point at which half the units cost more and half less -- peaked at a record $625,000 this June, it has been bouncing around between the high $500,000 to low $600,000 range for 15 months. At some point, possibly this month or next, many expect the median home price to fall below its year-ago level for the first time since March 1996. One thing is certain: The last two market cycles are like none in recent Valley history. This boom has been longer and stronger than its bust. The bust The previous boom market peaked in 1988, when a then-record 15,263 houses changed owners, a 14.5 percent annual increase. In 1988 the median price increased a record 32.1 percent to $195,708. The price record for that cycle came the following year when it twice hit $245,000. But 1989 also saw sales fall 16.4 percent. The price slide began in 1990 when the median for the full year fell 2.4 percent. The full-year average median price then fell for seven consecutive years. Starting in March 1992, the median price fell on an annual basis for 37 consecutive months. In November 1995, it dipped to $155,000, the low point in that down market, 36.7 percent below the old record high. The boom The sale upturn began in 1996 with a 7.6 percent annual increase. Sales then increased for three consecutive years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time biggest being a 14.7 percent gain in 1998. Prices took off in 1997 when the full-year median increased 3.4 percent. Since then it has increased annually for 116 consecutive months. Price gains far outstrip out·strip tr.v. out·stripped, out·strip·ping, out·strips 1. To leave behind; outrun. 2. To exceed or surpass: "Material development outstripped human development" the loss of the early 1990s. From its low point in 1995, the median price skyrocketed 303.2 percent to a June 2006 record. It is up 293.5 percent through October. From the prior boom market record, the median price is up 149 percent. But October's sales total of 771 houses is the lowest for that month since 1992. So is this the 1990s all over again? ``It feels exactly the same,'' said Realtor Raquel Magro of the Northridge office of Pinnacle pinnacle (pĭn`ĭkəl), minor architectural motif of vertical tapering shape, usually crowning a pier, buttress, or gable. Although sometimes it appears in Renaissance design, as in the Certosa di Pavia, it is almost exclusively a medieval Estate Properties Inc. Magro has been selling Valley houses and condominiums for 24 years and has seen both bust and boom. ``In my opinion, prices are adjusting themselves to 2005. And what I'm seeing is that anything under $450,000 is selling, even with multiple offers. That seems to be the price for affordable housing in the starter market.'' She also saw another change last week. Magro specializes in foreclosed properties and last week a lender hired her to market a Burbank condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. priced at $519,000. The owner who lost the condo paid $530,000 in September 2005 and it was being rented out at the time of the foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. , Magro said. Buyers are still setting high asking prices and it usually takes three cuts to trigger a sale. Some buyers who tried to time the price peak now are simply taking their properties off the market until things pick up again, Magro said. To Jerry Carlisle, who has been inspecting properties for 20 years, the current climate has a sense of deja vu See DjVu. . His business has been down by as much as 35 percent since the sales slide started. ``I'm concerned with it. I think it's an indication of a down trend in the market that may be here for some time, but I have no way to predict that,'' he said. Part of it is the market and that there is more competition from other inspection firms now. ``A lot of it has to do with the time of year. When school starts again, you have fewer people selling their homes,'' he said. Carlisle has stepped up his marketing, going out and meeting Realtors, speaking at office meetings and sending out brochures. But he is not turning bearish Bearish Words used to describe investor attitude. A bearish investor believes that a particular asset or the market as a whole will decline in value. bearish on the residential real estate market. Not just yet. ``I think that the real estate market in the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. area will be very good. The reason for that is the people that hire me, 25 percent are from the L.A. area and the others are from other parts of the world. So there is demand,'' he said. Market's turn Jim Link, executive vice president of the Van Nuys-based Southland south·land or South·land n. A region in the south of a country or an area. south  land·er n.Noun 1. Regional Association of Realtors, said the market has definitely made a turn. But this slump Slump A temporary fall in performance, often describing consistently falling security prices for several weeks or months. likely won't bring a twin whammy wham·my n. pl. wham·mies Slang 1. A supernatural spell for subduing an adversary; a hex: put the whammy on someone. 2. of falling sales and collapsing prices. The last two market swings were not exactly normal, either. ``I would say that it is the longest sustained boom market since I've been here and I definitely think it lasted longer than anyone expected,'' he said. Industry officials and analysts had predicted as long ago as two years that sales would soften and prices would flatten flatten - To remove structural information, especially to filter something with an implicit tree structure into a simple sequence of leaves; also tends to imply mapping to flat ASCII. "This code flattens an expression with parentheses into an equivalent canonical form." . But the market kept going until late last year. ``What we're getting now is that correction,'' Link said. It seems to take more than a sales decline to tug down prices. When sales plunged in 1990 the median price eased down. But that came after the Cold War ended and huge defense spending cuts Noun 1. spending cut - the act of reducing spending cut - the act of reducing the amount or number; "the mayor proposed extensive cuts in the city budget" wrought massive job losses in the aerospace sector, which was then a dominant component of the Los Angeles area economy. Many of those jobs moved to other parts of the country and people followed them. Many of those who lost jobs also lost their homes, foreclosures spiked spike 1 n. 1. a. A long, thick, sharp-pointed piece of wood or metal. b. A heavy nail. 2. A spikelike part or projection, as: a. and the real estate market tanked. The long boom that followed the early 1990s' collapse began unwinding in 2004, when sales decreased an annual 4.3 percent. The median price though, increased 26.3 percent, the second-biggest on record in the association's database dating back to 1988. Last year, sales decreased 3.7 percent, but the median price gained 20.1 percent. This year's sales decline will be in the 20 percent range and the median price gain in single digits percentage wise. L.A.'s economy This down market will probably not end up like the 1990s for one reason: the economy. It's on much firmer footing now. Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge CSUN offers a variety of programs leading to bachelor's degrees in 61 fields and master's degrees in 42 fields. The university has over 150,000 alumni. It's also home to a summer musical theater/theater program known as TADW (TeenAge Drama Workshop) that leads teenagers through an , has noted that the local economy has a broader base and is expected to add jobs over the next several years. Job growth can help mute mute (my  t), in music, device designed to diminish uniformly the loudness of a musical instrument. downward price pressure from sagging
sales. And the housing market sailed right through the recession in the
early 2000s.
When this boom started no one guessed it would last this long. Prices have stayed in a fairly narrow range for more than a year and sales have been falling from their year-ago level for the past 12 months. But while no one can say how long this slump will last, Blake seems certain about future Valley housing markets: ``I think they will cycle less violently,'' he said. greg.wilcox(at)dailynews.com (818) 713-3743 CAPTION(S): 5 photos, 2 boxes, 2 charts Photo: (1 -- color) no caption (home) (2) Granada Hills: $146,000 (3) Canoga Park: $172,500 (4) Sylmar: $239,950 (5) Granada Hills: $194,000 Photos by David Sprague/Staff Photographer Box: (1) Housing bubble burst? SOURCE: Southland Regional Association of Realtors Warren Huskey/Staff Artist (2) FAST FACTS Chart: (1) Housing bubble burst? Warren Huskey/Staff Artist (2) On the rise SOURCE: Southland Regional Association of Realtors Gregg Miller/Staff Artist |
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