Study reveals home sales surging in Hancock Park, Crenshaw area.

The residential real estate market in Los Angeles County is displaying pockets of mortgage activity, with both high-income and low-income neighborhoods seeing action, according to a study done for the Business Journal by real estate consulting firm TRW-REDI Property Data.

Prestigious Hancock Park and the well-kept working-class Crenshaw neighborhood have experienced the largest increase in residential mortgage activity during the past 12 months, compared with the same period a year ago, according to Riverside-based TRW-REDI.

Meanwhile, the more-depressed areas of Lakewood and Pomona showed the biggest decreases in mortgage activity. However, consistent with the trend that income level is no predictor of mortgage activity level, some nice pockets of Torrance and the affluent neighborhood of Belmont Shore in Long Beach also suffered dramatic declines in mortgage activity.

"There is no straightforward relationship between an area's income level and growth in mortgage activity," said Nima Nattagh, market research analyst for TRW-REDI, who compiled the report. "The study gets rid of a lot of misconceptions lenders have."

The study compared close to 97 percent of all loans (not including refinance loans) made in L.A. County between June 1991 and May 1992 with loans made between June 1992 and May 1993.

For the study, residential loans were grouped by zip code. All residential areas of L.A. County were studied, but only those zip codes with at least 100 residential loans issued during the 12-month period were included in the results. The study included 80,245 loans in the 1991-92 period and 72,171 loans in 1992-93.

Zip codes were then ranked according to their percentage increase or decrease in mortgage lending activity in the June 1992-to-May 1993 period, compared with the same period a year ago.

Hancock Park -- the established neighborhood of wide, tree-lined boulevards and stately mansions that were built in the 1920s -- posted the county's highest jump (29.6 percent) in loan activity.

Although a growth in mortgage activity may be considered a sign of housing market strength, it is more a sign that home sellers in those neighborhoods are deciding to drop their asking prices to more accurately reflect today's lower market values, said industry sources.

The average home sales price in the Hancock Park area (90020 zip code) fell from $820,155 in 1992 to $619,710 in 1993, according to a sample survey conducted by TRW-REDI. Average price per square foot fell from $222.36 to $172.98.

TRW-REDI's survey on home prices was done separately from its study on mortgage activity. Unlike the exhaustive study on home mortgage loans, the study on home prices was based on a sample of homes.

"Just because homes are finally selling doesn't mean there is a hot market in Hancock Park," cautioned Richard Peiser, director of the Lusk Center for Real Estate Development at USC and a nearby resident of Hancock Park. "The numbers are more evident of where people are fleeing, not going to."

He said anyone who has been in the neighborhood for at least 10 years either wants to leave or is leaving.

As a sign of just how willing homeowners are to lower their asking prices, he said, a 6,000-square-foot mansion that was on the market nine months ago for $2.3 million could probably be bought today for $825,000. Another house that was on the market for $900,000 in 1991 was foreclosed on and auctioned at $475,000, with no takers, he said.

The people who are moving into the neighborhood, are Koreans and entertainment executives, said Peiser. In prior years, he said, attorneys were the ones flocking to Hancock Park.

In the Crenshaw area -- a post-World War II neighborhood located east of La Brea Avenue and south of Exposition Boulevard -- Hispanics are moving into homes being vacated by elderly African-Americans who are leaving the state, said Nate Bertrand, manager of Century 21 Nabrit Realty Inc. on Martin Luther King Boulevard. Bertrand said his office is hiring more and more Hispanic real estate agents.

Loan activity in the Crenshaw neighborhood jumped 28.3 percent from the prior year, according to TRW-REDI's report. The average home sales price there decreased slightly from $202,772 in the June 1991-to-May 1992 period to $192,074 in the June 1992-to-May 1993 period, according to TRW-REDI's sample of 1,481 homes in the neighborhood.

Reflecting a flight of Angelenos to the outlying suburbs, neighborhoods in West Covina, Glendale, San Gabriel, Santa Monica and Lancaster also showed signs of increased mortgage activity.

Jennie Manders, a real estate broker for Dilbeck Realtors in Glendale, said she's seen an uptick in the market in the last six months. The number of sales are finally exceeding the number of listings in her office, she said. Home buyers are coming to Glendale from the San Fernando Valley, Hancock Park and Los Feliz, she said.

The central Glendale area which posted the sixth-largest percentage increase in mortgage activity is a mix of condos and homes in the $200,000 price range, she said.

Many of the neighborhoods which had the biggest decrease in mortgage activity were characterized by real estate agents as being "tough" areas to live.

The east Lakewood neighborhood, which suffered the biggest percentage decrease in mortgage activity (41.1 percent), was described as having a lot of graffiti and gang activity, according to an agent in the area, who did not want her name used. The neighborhood, located near Hawaiian Gardens, was developed in the late 1950s.

The average sales price of a home in that blighted neighborhood fell slightly from $178,611 to $151,431, according to TRW-REDI's sample of 911 homes in the area.

The Pomona neighborhood which suffered the second-biggest drop in mortgage activity (38.1 percent) is inhabited largely by unskilled laborers who live in somewhat-rundown housing, said another real estate agent who asked not be identified.

She said that Pomona neighborhood, like the east Lakewood neighborhood, was developed in the late 1950s. It was a booming working-class area in the 1960s and 1970s, but has been hit hard by the recession, she said.

The average sales price of a home in that Pomona neighborhood fell slightly, from $149,651 in the June 1991-to-May 1992 period to $148,020 in the like year-later period, according to TRW-REDI's sample of 2,083 homes in the area.

Even though three neighborhoods in Torrance also reported sizable decreases in mortgage activity from last year, an agent in that area insisted that business is finally increasing.

Larry Moore, president of Larry Moore and Associates Realtors Inc., said his two offices in Torrance and Redondo Beach recorded a total of 90 home sales in May. Many homes in Torrance that had been priced between $300,000 and $375,000 are now being purchased for $100,000 less by first-time home buyers, he said.