VALLEY HOME PRICES SURGE 24%; SALES AT 15-YEAR HIGH.

Byline: Gregory J. Wilcox Staff Writer

VAN NUYS - The median price of a single-family home in the San Fernando Valley soared an annual 24 percent to $395,000 during October but it didn't cool the market as sales hit their highest level for that month in 15 years, a trade group said Thursday.

The median price appreciated $76,500 in the 12 months since October 2002 and was $5,000 under the record $400,000 reached in August, said the Van Nuys-based Southland Regional Association of Realtors.

That run-up didn't faze consumers, though, and they bought 1,198 previously owned homes, a modest 1 percent annual increase but the most since Realtors bagged 1,451 sales in October 1988.

``It's defying gravity,'' Jim Link, the association's executive vice president, said of the market.

This year will be the second- or third-strongest for sales since the association started keeping records.

``This year may not outdo last year but it will be darn close,'' he said. The sales mark is 15,263 single-family homes in 1988.

This year's median price will certainly be a record, easily besting last year's 12-month average median of $309,175. Last year the median was under $300,000 from January to April. This year it's been well above $300,000 every month.

October is a critical month pricewise because that is when two major loan underwriters, Fannie Mae and Freddie Mac, decide whether they will raise their limit for conforming loans. It's currently at $322,700.

If a house costs more than that it could push buyers into more-expensive jumbo loans.

Association President Tom Carnahan thinks that limit might rise to $355,000, which would open the market to even more buyers.

Link said Realtors in California and Hawaii have been lobbying for a higher limit.

``We'd like to see it go even higher with the local median price hovering near $400,000, but any increase in the size of conforming loans will help many families,'' Link said. ``That would bode well for the 2004 market if it happens.''

Fannie Mae spokesman Jason Lobo said the answer will come Tuesday when the Federal Housing Finance Board releases its price survey based on what prices have done in the 12 months since October 2002. That survey is the basis for Freddie Mac's and Fannie Mae's action.

Lobo would not speculate on what the two big mortgage companies might do.

The rising prices continue to push bargain hunters into the less-expensive condominium market. Last month escrow closed on a record 461 condominiums, an annual increase of 9.2 percent. The old mark was 444 sales in 1988. The median price, the point at which half the units sold for more and half for less, soared 24.7 percent to $247,000.

But that was 5 percent under the $259,900 record set in September.

One factor that did not change was the tight inventory. Active listings at month's end fell an annual 27.5 percent to 2,696 units.

The association said this is a dismal 1.6-month supply at the current sales pace.

Activity should be strong this month and next since an October record 1,734 escrows were pending at month's end. That's a figure typical of the busy summer months, the association said.

``The market is going pretty strong. There is nothing on the horizon that would lead me to believe the market is going to slow down,'' said Nima Nattagh, an analyst at FNC, which supplies data to the mortgage banking industry.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com

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HOME PRICES SOAR

SOURCE: Walker Associates