SLIPPERY SLOPE FOR VALLEY HOME SALES CONTINUES AUGUST SEES ANNUAL 33% DROP; MEDIAN PRICE UP BY JUST 2%.

Byline: GREGORY J. WILCOX Staff Writer

The San Fernando Valley's residential real estate market continued its free fall in August with sales dropping an annual 32.9 percent and the median price making another tepid advance, a trade association said on Monday.

Last month 825 previously owned single family homes changed owners, a 2 percent uptick from July but the lowest total for the month since 1993, according to the Van Nuys-based Southland Regional Association of Realtors.

It's the 11th consecutive annual sales decline.

``Combining July and August together things are a little slower than we expected. July took a surprising downturn and August was about the same,'' said Jim Link, the association's executive vice president.

The median home price increased 2 percent over the past 12 months, or $12,000, to $610,000. It gained $3,000 from July but remains under June's record of $625,000.

Link said that sometime in the next several months the median price may fall under the year-ago level by several percentage points and then bounce up and down as the market shakes itself out.

Sales have settled into a pattern of less than 1,000 a month since last October. Since then counts have ranged from a high of 998 in October to a low of 582 in January.

Last year sales topped 1,000 every month from March through September. Sales for the whole year totaled 12,786 transactions.

``Today's market is sustainable and can be used as a benchmark -- not last year's inflated, artificial madness,'' said association President Steve White.

The inventory of properties listed for sale soared an annual 115.7 percent to 6,832 properties, a 6.2-month supply and well above the less than one-month to two-month supply typical of the last several years.

This supply surge is allowing buyers to shop around and force many prospective sellers to reduce prices.

Link notes that the inventory increase sounds ominous but it would have to nearly triple from this level to tip the market fully in favor of buyers.

``And nothing on the horizon suggests that will happen,'' he said.

Current conditions should lead to a fairly stable market but it's going to take some attitude adjustments from both buyers and sellers.

For example, buyers won't be successful submitting extremely now bids nor can sellers set prices unrealistically high, Link said.

The smaller condominium market behaved similar to the single-family sector last month. Sales plunged an annual 34 percent to 283 transactions and fell 10.7 percent from July.

The median price rose an annual 1.3 percent to $380,000 and fell 5 percent from July.

Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge, said that this is a trend that's been coming.

In this current up cycle, total-year single-family sales peaked at 13,878 in 2003 and have fallen each year since.

``The speculators are out of the market so that is one element of demand that is way down. And buyers are taking a wait-and-see attitude to see how far down prices go,'' Blake said.

greg.wilcox(at)dailynews.com

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SOURCE: Southland Regional Association of Realtors

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