Home Prices Drop 3% From December as Market Slows

The average resale price of a single-family house in the San Fernando Valley fell 3% to $298,300 in January from $308,500 in December, the San Fernando Valley Board of Realtors said Monday.

The price level still marked a 13% increase from the average price in January, 1989, of $263,600.

The local housing market continued to be sluggish in January as a flood of sellers put their houses on the market last month, boosting the number of new listings of single-family homes 111% in January to 2,721 from 1,288 in December.

Sales, meanwhile, increased 9% to 770 in January from 708 in December. But sales still fell 27% short of levels a year ago, when a total of 1,057 were sold in the Valley.

The average resale price of a condominium meanwhile reached a record high of $156,200 in January, up 1% from $154,700 in December. The latest monthly figure was 17% higher than in January, 1989, when the average resale price was $133,100.

The number of condominiums resold increased 7% in January to 304 from 284 in December. But condominium resales were 13% lower than in January, 1989, when 349 were resold.

The board called the sales of single-family homes “sluggish” in a release, but predicted that falling or only slowly increasing prices would lead to more sales volume.

“Because listings are high, a buyers’ market exists which is forcing owners who must sell to reconsider the amount of profit they’re willing to accept,” said Jim Link, the board’s executive vice president. “Owners have finally realized that they are not losing money by lowering their asking price, since you cannot lose what you never had.”

Link predicted that increasing prices would soon slow condominium sales. “I think you’ll see the same pattern we’re seeing now in single-family homes: excessive pricing drags sales down, listings back up.” Eventually, Link said, “owners readjust prices, sales resume and the market seeks a new level.”

Fixed-rate mortgages have begun to climb in recent weeks and on average are now higher than 10%, which could slow any comeback in the local housing market.

The Valley realty board, California’s largest, reports sales of houses and condominiums by its members in the area from North Hollywood to Agoura. Its statistics do not include most new residences.

JANUARY VALLEY HOUSE SALES

NORTH WEST Avg. Price: $266,000 Sales: 24

NORTH CENTRAL Avg. Price: $306,200 Sales: 122

NORTH EAST Avg. Price: $176,500 Sales: 147

SOUTH WEST Avg. Price: $367,000 Sales: 170

SOUTH CENTRAL Avg. Price: $336,700 Sales: 111

SOUTH EAST Avg. Price: $307,300 Sales: 196