VALLEY HOUSING MARKET REMAINS SOFT BUYERS GET THEIR CHANCE FOR SOME HAGGLING.

Byline: GREGORY J. WILCOX Staff Writer

VAN NUYS -- The San Fernando Valley's housing market remained sluggish in May with sales falling an annual 25 percent and the median price increasing by its smallest margin in 62 months, a trade group reported Wednesday.

Last month, 856 previously owned single-family houses changed hands, 286 fewer transactions than a year ago, said the Van Nuys-based Southland Regional Association of Realtors.

It was the eighth consecutive month in which sales declined from the previous year and in which sales numbered less than 1,000. The last time the latter happened was during a 20-month string that began in September 1996.

Association Executive Vice President Jim Link said that the sales decline looks big, but he notes that last May's sales total, 1,142, was one of the highest ever.

Meanwhile, May's median price increased an annual 4.3 percent to $600,000. And that is the smallest annual gain since a 1.9 percent increase in April of 2001.

The median has been relatively flat for the past 12 months, ranging from $575,000 in May 2005 to a record $615,000 this March.

The median price had been making double-digit gains -- many of them 20 percent or more annually -- from January 2002 to this April.

The weaker appreciation and falling sales are moving the market more in favor of buyers.

``I think what we're going to see is interest rates stay favorable and sellers negotiate a little bit more than they are now,'' said Link.

``Buyers are saying `Hey, things are coming down, and we can start bargaining.'''

The association report came out one day after DataQuick Information Systems reported similar market conditions for all of Southern California. And on Wednesday, UCLA's Anderson Forecast noted that the housing market is softening but there is little likelihood of a price collapse.

Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge, also doesn't believe that local prices will soon fall under year-ago levels.

``We don't see job losses that would trigger a housing price slide,'' he said.

But there is a wild card. Blake said that if long-term interest rates make a big move up, a price decline could result.

One thing that is helping temper appreciation rates, and favoring buyers, is the inventory buildup.

At the end of May there were 4,072 houses listed for sale, 130.3 percent more than a year ago. Including condos, inventory increased 145.7 percent last month to a 4.4-month supply.

But that is still less than the five- to six-month supply the association considers normal.

Association President Steve White said that this is neither mainly a buyer's nor a seller's market.

``The current market offers opportunities for buyers and sellers alike.''

The market for less-expensive condos was stronger last month than for single-family houses. During May 400 condos sold, up 1.9 percent from a year ago and 9.9 percent from April.

The median price, the point at which half the units cost more and half less, increased an annual 13.1 percent to $398,000. That's equal to a $46,000 gain in the past 12 months versus $25,000 in appreciation for a house.

``I'm not surprised condo sales are up. There is huge demand in the moderately priced condo market and for lower priced single-family homes,'' Link said.

greg.wilcox(at)dailynews.com

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SOURCE: Southland Regional Association of Realtors