Home prices climb in county

L.A. County home prices rise to record.
By: Annette Haddad: latimes.com
The L.A. median rises 6.5% in December from a year earlier despite a 12.9% drop in sales.

Don't talk to Brandon Brennan about it being a buyer's market for real estate.

Despite a widespread slowdown in sales, Brennan made bids on four Westchester houses — all below asking price — and was rebuffed by sellers waiting for a better offer.

"I didn't feel like it was a good time to pay full price for a house," said Brennan, relocating from Ventura because of a job transfer. "But with every offer, the sellers didn't bother to counter because they were getting other offers."

Such was the housing market at the end of 2006: Although Los Angeles County's median home price rose 6.5% from the previous year to reach a record $522,000 in December, the number of sales fell 12.9%.

"What we're seeing is a market that is rebalancing itself after the surge we had," said John Karevoll, chief analyst for DataQuick Information Systems, the La Jolla research firm that compiles monthly numbers. "The question, as we come off the top, is how far off the top we're likely to come."

As real estate agents like to say, homes that are selling these days are those that are "priced right" — at or slightly below the prevailing market rate. That means there can still be competition for certain houses in certain neighborhoods — as Brennan found.

Meanwhile, the majority of houses sit. The average days on the market for existing homes in L.A. County rose 5% from November to December to 104 days, according to multiple-listing service figures compiled by brokerage ZipRealty Inc. In the same period, the number of homes on the market declined 14% to 32,363.

"Buyers are going after the same few homes, the low-hanging fruit that are the good deals," said Michael Davin, executive vice president of CataList Homes, a Hermosa Beach-based brokerage.

The transactions that were completed in December closed at slightly higher prices, allowing L.A. County to recover appreciation lost in the previous five months. The December median price of $522,000 was up 2.4% from November's $510,000 and was the highest since the previous record of $520,000 set in July.

The median price is the point at which half of all homes sell for less, half for more.

For the full year, Los Angeles County's median home price rose 8.5% in 2006, while sales fell 16.8% compared with 2005. Price appreciation for the county peaked in 2003, when the year-over-year median price rose 24% from the previous year.

Throughout 2006, price appreciation slowed considerably from the double-digit gains logged in the previous three years as sales exploded. Karevoll said he expected price growth to continue to "bounce around" in the coming year — rising year over year one month, decelerating the next — as sales return to a more normal pace.

One trend Davin of CataList Homes has noticed in the last 45 days is the rise in the number of pending home sales that are subject to the buyer selling an existing home.

"A lot more homes in escrow are contingent on the sale of the down-leg property," he said. "There are fewer first-time buyers now because of the high prices. They realize they won't be making the same great appreciation."

December is typically one of the strongest months for real estate activity as buyers and sellers work to close deals before the end of the year, usually for tax or other bookkeeping reasons. That trend was particularly evident in the new-home category last month as sales rose 1.7% from the year before and the median increased 14.8% to $511,000, DataQuick said.

First-time buyer Dennis Hsii found more of a buyer's market when he was ready to purchase a new home late last year.

Hsii, 28, who works in technology, was able to negotiate with builder Standard Pacific Corp. to get a discount on a condominium under construction in Playa Vista that was listed in the mid-$700,000s.

He also received $20,000 in incentives to put toward upgrades, homeowners dues or mortgage costs.

His home was supposed to be ready in mid-December, but construction delays have pushed back his move-in date to February. In the meantime, the builder has given him an additional $4,000 to defray living expenses.

"I'm not disappointed," Hsii said. "But I'm eager to move in. It's a big deal being a new homeowner."

Brennan, the Westchester house hunter, and his wife, Christina, eventually had an offer accepted on a fixer-upper that had been reduced to $799,000, in part because they were willing to close within two weeks. They wound up paying about 2% below the asking price, but that was still more than they had hoped to spend.

"We went through a major ordeal," Brennan said, "trying to find a decent deal."

Data for other regions of Southern California are expected today.


*

(INFOBOX BELOW)


Home sales

Median price and number of homes sold in L.A. County

Sale prices Year-over-year
(In thousands) Dec. '05 Nov. '06 Dec. '06 Chng.
Resale houses $520 $540 $550 +5.8%
Resale condos $400 $410 $412 +3.0
New homes $445 $483 $511 +14.8
All combined $490 $510 $522 +6.5
Number of sales
Resale houses 6,276 5,167 5,405 –13.9
Resale condos 1,542 1,277 1,254 –18.7
New homes 1,027 907 1,044 +1.7
All combined 8,845 7,351 7,703 –12.9


Source: DataQuick Information Systems