VALLEY HOME SALES PLUNGE MEDIAN PRICE UP 0.8 PERCENT, SMALLEST BOOST IN YEARS.

Byline: GREGORY J. WILCOX Staff Writer

Home sales in the San Fernando Valley and across Southern California continued cratering in September, with prices flattening in some areas and falling slightly in others, according to two reports released Thursday.

Last month, sales of previously owned single-family homes in the Valley plunged an annual 31.1 percent to 814 transactions, 368 fewer than a year ago, according to the Southland Regional Association of Realtors.

The median price increased 0.8 percent to $595,000, just $5,000 more than a year ago.

The percentage price increase was the smallest since a 3 percent dip in January 1997. In the smaller condominium market, the median price fell 1.3 percent to $380,000. That's the first price decline for this market in more than 10 years. It's likely the malaise will persist and single-family prices could go negative when this month's numbers are tallied.

``I would not be surprised if prices went down year to year next month. The trend has been sort of inching that way,'' said Jim Link, the association's executive vice president.

He thinks sales have leveled off.

A better picture should emerge next month because the sales slide started in October, 2005. Sales have been under the 1,000 threshold every month since.

``I think the market was so hot that the correction was inevitable,'' Link said. ``I really think that this downturn is driven by one key factor: Prices got to the point where buyers, even if they could qualify, said `I'm not comfortable. That's too much.'''

The market typically cools in the fourth quarter so more weakness is expected.

Pending escrows, an indicator of future sales, totaled 1,065 at month's end, down an annual 23.9 percent and a 12.6 percent decrease from August.

``This slowdown is forcing speculators out of the market and bringing activity back down to Earth,'' association president Steve White said in a statement. ``It's already a much more balanced market and buyers will get even more active as they see that prices have stabilized and are back within their comfort zone.''

Last month, condominium sales fell 31.2 percent to 299 transactions, or 136 fewer than a year ago. Still, September sales increased 5.7 percent from August.

At the end of September, there were 6,795 properties on the market, enough for a 6.1-month supply at the current sales pace.

The Valley market mirrored the numbers for all of Southern California last month.

Sales in the six-county region fell an annual 28.6 percent to 22,654 transactions, according to market tracker DataQuick Information Systems. Its figures include new and previously owned houses and condos.

That's the lowest count for any September since 1997, when there were 21,320 sales.

The median price in the region increased an annual 1.9 percent to $484,000 -- the smallest increase since a 1.3 percent gain in February 1997, the company said.

``Now is when things get interesting. The vast majority of homebuyers have done very well for themselves the past few years. As things level off, though, we should be able to quantify how many buyers overpaid during the frenzy, and by how much,'' DataQuick president Marshall Prentice said in a statement.

The median price, the point at which half the units cost more and half less, fell in two markets.

In Ventura County, the median price fell 3.3 percent to $584,000. That's the first price drop there since a 0.4 percent drop in April 2001. Sales in the county fell 20.5 percent to 1,097 transactions.

In San Diego County, the median price fell 4.4 percent to $476,000. It's the fourth consecutive annual decline. Sales fell an annual 35 percent, the biggest decline in the region, to 3,207 transactions.

In Los Angeles County, the median price increased 3 percent to $509,000. Sales fell 27.9 percent to 7,917 transactions.

Even though sales are well off year-ago levels, DataQuick says indicators of market distress are still at a moderate level. For example, foreclosure activity is rising, but is still historically low.

DataQuick analyst John Karevoll said a price collapse remains unlikely.

``The most likely scenario here is that the market overshoots its (price peak) by 1 (percent), 2 (percent) or 3 percent, then comes off that peak and settles in,'' he said.

And that, Karevoll noted, is what happened in the Bay Area after the dot-com bust. That brought about six months of flat prices before home prices started increasing again.

greg.wilcox(at)dailynews.com

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SOURCE: Southland Regional Association of Realtors

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