Printer Friendly


 LOS ANGELES, Oct. 11 /PRNewswire/ -- The mild resurgence in sales of existing single-family homes that began 11 months ago continued during September, rising 12 percent above 1992 totals, the San Fernando Valley Association of Realtors reported today.
 The 774 closed escrows marked the sixth consecutive month that single-family home sales have increased over 1992.
 The Association also reported that total resale activity for the first nine months of the year rose 2 percent over the same period last year; a total of 7,528 closed escrows, compared to 7,379.
 "Considering the uncertainty still haunting the economy, the housing market is holding up better than expected, especially for this time of year," said Alice McCain, president of the San Fernando Valley Association of Realtors.
 "Around this time last year the market died, but buyers are still out there today," she said. "Some of them are finding fantastic bargains."
 Lower prices, extremely low interest rates and an ample supply of homes for sale continue to lure prospective buyers into the market, McCain said.
 Sales to buyers who only two years ago were priced out of the market captured the largest number of sales, McCain said. Realtors reported sporadic activity in moderate and higher priced homes, especially properties sold via foreclosure or where owners offered steep price cuts.
 Some owners of more expensive homes can sell without taking a loss simply because they did not fall prey to a common trap of the 1980s using home equity to finance purchases unrelated to their real property, said Jim Link, the association's executive vice president.
 "Southern California unquestionably is going through a period of almost total economic restructuring," Link said, "but part of today's housing problems resulted because too many people borrowed too much against their home."
 The Tax Act of 1986 eliminated tax deductions for other credit purchases and prompted people to pay for a vacation, boat or car using credit lines secured by their home equity. Interest on home equity credit lines, like home mortgage loans, remained tax deductible.
 "Had they not borrowed so much against their property many of those owners would have had a cushion that could have kept them out of foreclosure or given them room to offer the discounts needed to sell," Link said.
 The message homeowners must accept is simple, Link said.
 "Over time, housing will appreciate in value," he said. "If people who purchased between 1989 and 1991 can ride out this market, it's likely they will recapture what may have been lost. But there is no guarantee housing will be a profitable investment, each and every year with no downturns.
 "Everyone linked to real estate must return to the traditional view of housing primarily as shelter," Link said. "Housing is not a cash cow and it certainly is not, and never was, a guaranteed investment."
 As the economy stabilizes, jobs increase and homebuyers change their attitudes, the downward pressure on prices gradually will ease, he said. Notices of default, an indicator of future foreclosure activity, appear to be declining, but prices will not stabilize until lenders sell off their inventory of properties.
 Some lenders are holding onto property while others are aggressively selling foreclosed property in the hope of quickly resolving the current economic turmoil.
 The average resale price of single-family homes that closed escrow during September was $244,100, down 13.2 percent from 1992, but up slightly over the average reported in August. The single-family median price was $190,000, down 10.6 percent from September 1992.
 One hundred fifty condominiums sold last month, up 19 percent over August, but down less than 1 percent from 12 months ago. The average condominium resale price was $139,500, down 8.5 percent from September 1992.
 The Multiple Listing Service operated by the San Fernando Valley Association of Realtors reported a total of 12,121 active listings as of the end of September; 9,507 single-family homes and 2,614 condominiums.
 The San Fernando Valley Association of Realtors is a local trade association comprised of 7,800 members who serve the real estate needs of the vast community spanning the Valley from North Hollywood to Calabasas. It is the largest local Association in California and the third-largest nationwide.
 -0- 10/11/93
 /CONTACT: Alice McCain, president, 818-993-1300, or Jim Link, executive VP, 818-786-2110/

CO: San Fernando Valley Association of Realtors ST: California IN: FIN SU:

JB-JL -- LA005 -- 0516 10/11/93 07:45 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 11, 1993

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters