HOLD FOR RELEASE: January 18, 1993

Despite an Optimistic Finish,

1992 Housing Sales Fall 13%

Sales of existing housing fell 12.7 percent in 1992 even as optimistic signs emerged in the closing months of the year that suggested the worst of the recession may be over.

"Unlike the recession of a decade ago, low interest rates, continued demand for housing, especially among first-time buyers, and falling resale prices have tempered the effects of this recession," said Lon Adams, the 1993 president of the San Fernando Valley Board of Realtors.

"With only 5 percent to 7 percent of listed properties selling each month, this certainly is not a great time to sell unless you intend to trade up to a better home," Adams said, "but it is a fantastic time to be a buyer."

Members of the San Fernando Valley Board of Realtors negotiated 9,805 home sales in 1992.

Despite the drop, the 1992 sales total was 48.6 percent higher than the record low of 1982 when a mere 6,598 Valley residential properties changed owners.

The drop in resale prices means more people can afford to buy a home than at any point in recent years, Adams said.

"The benefit of today's price deflation is obvious," he said. "As prices fall, housing becomes more affordable to more people, which means the resale market expands and there are more buyers and sellers.

"It would be fantastic if every owner could get a sky-high price," Adams said, "but where will the buyers come from if only a few people can afford housing?"

The effects of low interest rates, high inventory and falling resale prices appeared to bolster sales in the waning months of 1992.

The year ended on a strong note as single-family home sales in December increased 12.5 percent over the prior year. The 713 single-family homes that closed escrow in December was the first increase for the month in three years and the best December total since 1988.

At the sales pace reported in December, it would take more than 13.6 months to sell the current inventory -- 11,401 active listings. An average inventory, giving an advantage to neither the buyer nor the seller, would be a five- to six-month supply.

Assuming home loan interest rates remain at or near their lowest point in two decades, Board officials expected housing opportunities and the current buyers' market to prevail well into 1993.

"The market remains slow, but consumer optimism is growing," said Jim Link, the Board's executive vice president. "While we don't expect 1993 to be a great year, there should be a modest improvement when the California economy works through the recession and finds its new pace."

The San Fernando Valley Board of Realtors reported other statistics today, including:

#The Multiple Listing Service operated by the San Fernando Valley Board of Realtors reported 32,114 properties listed for sale during 1992. That total was down 1.3 percent from the prior year and 13.8 percent lower than the record high 37,259 listings reported in 1991.

#1992 saw only the second drop in the combined residential average resale price since the Board started keeping statistics in 1970. It was a 2.3 percent drop from the 1991 average to $254,067. The only other annual total that fell was 1982 when the combined average fell 1.3 percent to $138,982.

#Condominium sales, which had kept the local housing market moving during the worst of the recession, did not fair well in the closing months of 1992, falling 5.2 percent from November and 30.4 percent from December 1991.

"First-time buyers have shifted their focus from condominiums to single-family homes," Link said. "Low interest rates coupled with reduced prices opens a window of opportunity for buyers who previously couldn't qualify for a single-family home."

#The condominium resale total of 2,199 properties was the second worst year since the Board started keeping separate statistics in 1985. The condo total was off 16.9 percent from 1991.

#1992 was the second consecutive year the single-family annual average resale price dropped, falling 2.9 percent to $283,386. Board members completed 7,774 single-family home sales.

The year also market the first time since the Board started keeping separate statistics in 1985 that the condominium annual average resale price fell. That condo average on 2,199 sales was off less than 1 percent to $152,212.

The San Fernando Valley Board of Realtors is a local trade association comprised of 7,900 members who serve the real estate needs of the vast community spanning the Valley from North Hollywood to Calabasas. It is the largest local Board in California and the third largest nationwide.

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