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LINGERING RECESSION HAMPERS 1991 CALIFORNIA RESALE HOUSING MARKET

 LINGERING RECESSION HAMPERS 1991 CALIFORNIA RESALE HOUSING MARKET
 LOS ANGELES, Feb. 11 /PRNewswire/ -- Closed-escrow California home sales declined during 1991, reflecting an overall recessionary environment, according to full-year figures compiled by the California Association of Realtors (C.A.R.).
 "It's not surprising that California home sales declined last year, given the sluggish overall economy and low consumer confidence throughout much of the year," said C.A.R. President Chuck Lamb. "However, we have experienced a spark in activity during the last few weeks, and we expect total sales this year to surpass 1991's level -- marking the turning point in California's real estate downturn," said Lamb, a San Fernando Valley Realtor. "The market should receive a welcome boost from attractive mortgage interest rates, favorable home prices and a recovery in the national economy."
 Among the highlights of C.A.R.'s 1991 full-year report:
 -- Statewide, 424,120 existing, single-family, detached homes closed escrow during 1991, down 6.2 percent from 1990, when a revised 452,100 homes were sold. Sales last year were still far above the 234,000 level experienced during the 1982 housing recession.
 -- The statewide median price of an existing, single-family detached home rose 3.6 percent from $193,360 in 1990 to $200,380 in 1991. Increased sales of four-or-more bedroom homes and a shift in sales toward coastal areas fueled the gain in the median price.
 -- A sharp increase in listings coupled with the sales decline raised C.A.R.'s Unsold Inventory Index. The Index, which measures the number of months it would take to deplete the supply of homes on the market at the current rate of sales, rose from 11.7 months in 1990 to 12.7 months in 1991.
 -- Closed-escrow sales of existing condominiums fell 13.5 percent last year.
 -- The statewide median condominium price increased 1.7 percent last year, up from $143,530 in 1990 to $145,940 in 1991. A greater sales share of larger, more expensive condominiums contributed to the condo price increase.
 "Last year's real estate market was one of the best ever for homebuyers, particularly first-time buyers," said Lamb. "Favorable single-family home prices and extremely low mortgage interest rates allowed many first-time buyers to purchase detached homes instead of condominiums."
 -- The marked decrease in condo sales caused an increase in the condominium Unsold Inventory Index. The Index expanded from 8.8 months in 1990 to 12.5 months in 1991.
 "Although housing sales activity declined last year, the level of sales was higher than our projection of 420,000 units due to the tremendous spring rally following the Gulf War," said Leslie Appleton- Young, C.A.R.'s vice president of research and economics. "Subsequently, economic uncertainty and lackluster consumer confidence contributed to weaker sales during the latter part of the year," said Appleton-Young. "However, low mortgage rates will help California's real estate market gain momentum, boosting the overall economy in the second half of 1992."
 Despite the increase in detached home and condominium prices, both were more affordable in 1991, compared to 1990.
 -- Twenty-three percent of California households could afford to purchase a median-priced detached home during 1991, up from 20 percent in 1990. Assuming a 20 percent down payment on the $200,380 median- priced home, a household needed a minimum annual income of $62,200 to qualify for a home loan. The monthly mortgage payment for that home, including property taxes and insurance, would be $1,555.
 -- Thirty-eight percent of the state's households could qualify for a mortgage to purchase a median-priced condominium last year, up from 33 percent in 1990. Assuming a 20 percent downpayment on the median- priced condominium, which sold for $145,940 in 1991, a household needed a minimum annual income of $45,300 to qualify for the loan. The monthly mortgage payment on that condominium would be $1,133.
 -- Mortgage interest rates fell to historical lows during 1991. According to the Federal Home Loan Mortgage Corp., fixed-rate mortgages fell from an average of 10.12 percent in 1990 to 9.24 percent, the lowest since 1977, when fixed mortgage rates averaged 8.84 percent. Adjustable-rate mortgages (ARMs) fell from an average of 8.36 percent in 1990 to 7.09 percent in 1991, the lowest since 1984, when ARMs were introduced.
 Regionally, most of the metropolitan, coastal areas -- Monterey, Orange County, San Francisco, Santa Clara and Ventura -- posted modest sales gains in 1991. Conversely, sales in the inland regions declined markedly, but median home prices in those areas rose slightly during the year.
 C.A.R. median price and sales data for detached homes are based on reports from 80 Boards of Realtors around the state. Median condominium price and sales data are based on a survey of 32 boards. The median price and sales data for detached homes and condominiums is based on closed escrow sales.
 The California Association of Realtors is a statewide trade association with more than 135,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
 REGIONAL PRICE AND SALES ACTIVITY(a)
 Percent
 Percent Change in
 1991 1990 Change Sales
 Median Median in Activity
 Price Price Price 1991 vs. 1990
 Calif. (sf) $200,380 $193,360 3.6 -6.2
 Calif. (condo) $145,940 $143,530 1.7 -13.5
 Region
 Central Val. $118,570 $116,330 1.9 -15.4
 High Desert $101,730 $105,090 -3.2 -16.4
 Los Angeles $214,940 $212,130 1.3 -3.6
 Monterey $233,660 $237,730 -1.7 21.8
 Nor. Calif. $135,020 $143,800 -6.1 -26.6
 Nor. Wine Co. $185,740 $179,180 3.7 -15.4
 Orange Co. $239,680 $242,360 -1.1 0.8
 Palm Springs/
 Lower Desert $122,990 $118,410 3.9 -22.6
 Riverside/S.B. $135,400 $132,130 2.5 -16.1
 Sacramento $137,640 $137,460 0.1 -23.7
 San Diego $187,510 $183,210 2.3 -6.4
 S.F. Bay $256,590 $259,290 -1.0 8.5
 Sta. Barbara $215,760 $219,580 -1.7 -10.5
 Santa Clara $260,850 $268,890 -3.0 7.0
 Ventura $234,930 $238,790 -1.6 13.2
 (a) Based on closed escrow sales of single-family, detached homes only (no condos). Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.
 (sf) single-family, detached
 Source: California Association of Realtors
 CALIFORNIA SINGLE-FAMILY, DETACHED CLOSED-ESCROW SALES
 1980 - 1991
 Pct. Change from
 Year Sales Previous Year
 1980 464,556 -20.9
 1981 336,144 -27.6
 1982 234,446 -30.3
 1983 343,037 46.3
 1984 381,916 11.3
 1985 404,932 6.0
 1986 488,258 20.6
 1987 511,600 4.8
 1988 562,240 9.9
 1989 539,290 -4.1
 1990 452,100 -16.2
 1991 424,120 -6.2
 CALIFORNIA SINGLE-FAMILY, DETACHED MEDIAN HOME PRICES
 1980 - 1991
 Pct. Change from
 Year Median Price Previous Year
 1980 $99,760 18.3
 1981 $107,940 8.2
 1982 $112,040 3.8
 1983 $114,620 2.3
 1984 $114,510 -0.1
 1985 $120,120 4.9
 1986 $133,930 11.5
 1987 $142,370 6.3
 1988 $168,560 18.4
 1989 $195,650 16.1
 1990 $193,360 -1.2
 1991 $200,380 3.6
 Source: California Association of Realtors
 1991 HOUSING AFFORDABILITY INDEX
 Median Monthly Minimum Percent
 Home Sales Housing Qualifying Households
 Price Payment(a) Ann.Income Qualifying
 United States $99,900 $775 $31,011 52
 California (sf) 200,380 1,555 62,200 23
 California (condo) 145,940 1,133 45,300 38
 Los Angeles 214,940 1,668 66,720 21
 Orange County 239,680 1,860 74,402 24
 Riverside/San
 Bernardino 135,400 1,051 42,030 36
 Sacramento 137,640 1,068 42,726 37
 San Diego 187,510 1,455 58,207 22
 San Francisco Bay 256,590 1,991 79,649 17
 Ventura 234,930 1,823 72,926 21
 1990 HOUSING AFFORDABILITY INDEX
 Median Monthly Minimum Percent
 Home Sales Housing Qualifying Households
 Price Payment(a) Ann.Income Qualifying
 United States $95,500 $783 $31,302 49
 California (sf) 193,360 1,584 63,378 20
 California (condo) 143,530 1,176 47,043 33
 Los Angeles 212,130 1,738 69,531 18
 Orange County 242,360 1,986 79,437 17
 Riverside/San
 Bernardino 132,130 1,083 43,307 31
 Sacramento 137,460 1,126 45,055 31
 San Diego 183,210 1,501 60,051 20
 San Francisco Bay 259,290 2,125 84,987 13
 Ventura 238,790 1,957 78,269 14
 (sf) single-family, detached
 (a) including property taxes and insurance
 Source: California Association of Realtors
 -0- 2/11/92 R
 /CONTACT: Lotus Lou or Jeff Hershberger of the California Association of Realtors, 213-739-8304/ CO: California Association of Realtors ST: California IN: FIN SU:


EH-JL -- LA004 -- 9180 02/12/92 11:01 EST
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