Housing Prices Continue Strong in Valley for May

Prices of existing houses in the San Fernando Valley continued strong in May, dipping only slightly below record levels. The average cost of a single-family house in May was $287,400, 1% below the record $289,700 price reached in April, the San Fernando Valley Board of Realtors reported Monday.

Last month’s average price also marked a 23% increase above the average price in May, 1988.

Sales of houses climbed 11% in May from the previous month, fueled in part by a recent sharp drop in mortgage interest rates. A total of 1,338 single-family houses were sold last month, up from 1,202 in April, the board said. However, the May figure trailed by 6% the year-earlier sales total of 1,418.

Condo Market Brisk

And the condominium market remained brisk. The average price of a condominium sold in the Valley last month was a record high $153,410, up 9% from $140,500 the previous month. Existing condominium sales jumped nearly 20% to 481 units from the 402 sold in April, the board said.

Recent declines in money-market interest rates have triggered a sharp decline in mortgage rates of up to 1 percentage point or more. A sizable number of lenders are offering fixed-rate mortgages in the 10.25% to 10.5% range, compared with 11% to 12% in March and April.

But the higher interest rates of a few weeks ago prompted many buyers to seek condominiums in May as opposed to higher-priced single-family houses, which produced the increase in sales and average prices of condominiums in May, the board said.

“First-time buyers and people of moderate income are running to get into something affordable,” Jim Link, the board’s executive vice president, said in a statement. “People realize that even as condo prices move up, they are still nearly half the average price of a single-family home.”

Demand for Housing

The board said demand for affordable housing in the Valley was also reflected in its inventory statistics. In May, the number of single-family houses listed for sale was 40% higher than a year ago, but condominium listings fell 23%, indicating consumers’ strong interest in available condominiums.

In the past couple of weeks, some lenders have dropped their charges on mortgage loans as low as 9.5%, but it’s unlikely that those additional declines in rates were reflected in the Valley board’s May statistics.

The Valley realty board, California’s largest, reports sales of existing houses and condominiums by its members in the area from North Hollywood to Agoura. Its statistics do not include most new residences, which generally are not sold by real estate agents, or sales by homeowners who sell their houses without agents.

MAY VALLEY HOUSE SALES

NORTH WEST Avg. Price: $272,800 Sales: 61

NORTH CENTRAL Avg. Price: $297,700 Sales: 187

NORTH EAST Avg. Price: $173,400 Sales: 261

SOUTH WEST Avg. Price: $349,500 Sales: 330

SOUTH CENTRAL Avg. Price: $310,700 Sales: 192

SOUTH EAST Avg. Price: $299,600 Sales: 307