SALES UP FOR NEW HOMES STATE LEVELS HIT A 20-YEAR HIGH.

Byline: Gregory J. Wilcox Staff Writer

Strong demand and continued low interest rates pushed new home sales across the state to their highest level in 20 years during 2005, with the best markets in Southern California, an industry tracker said Friday.

Last year consumers bought 136,228 new homes, up 4.4 percent from 130,480 in 2004, said La Jolla-based DataQuick Information Systems. Builders have done brisk business in the past three years. This cycle picked up momentum in 2003 with 116,803 new home sales, which surpassed the 103,131 sales in 1989, the end of the last boom market.

Sales of both new and previously owned homes began sinking the next year. New home sales dipped to a low of 38,454 transactions in 1993.

``Builders are a bit more careful these days. They used to build tracts and put up `For Sale' signs,'' DataQuick President Marshall Prentice said in a statement.

That's acting as a hedge against getting caught with an inventory overload that characterized the end of the 1980s market.

DataQuick's analysis includes homes sold by builders as well as condo conversions. Tear-downs and homes built by individuals are not included, nor are apartment complexes.

The numbers show that:

--Riverside County led the state with 26,294 new home sales, up an annual 19.7 percent. The median new home price rose an annual 17.1 percent to a record $418,000.

--San Diego County was second with 14,497 sales, up 8.6 percent. The median price slipped 1.2 percent to $476,000.

--Los Angeles County had the state's third strongest market with 10,872 sales, up 19.2 percent. The median price dipped 0.2 percent to $454,000.

Ventura County had 2,209 sales, up an annual 65.2 percent from what was an abnormally weak year in 2004, said John Karevoll, an analyst with DataQuick. The record median price, $708,000, increased an annual 4.1 percent.

It's no surprise that the new home price dipped in San Diego and Los Angeles counties.

``These numbers include condo conversions and (that) activity increased sharply last year. Since they are lower-cost homes, they pull down the median,'' Karevoll said.

Statewide, the median-priced new house cost $439,000 last year, up 13.7 percent.

Alan Nevin, chief economist at the California Building Industry Association, said the new home market this year will look a lot like 2005's. Price increases won't be as big, though.

And builders are taking a more cautious approach these days.

``Most of the homes here are sold by public builders, and they are under amazing pressure to keep their inventories low and their closings high,'' he said.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com