HOLD FOR RELEASE: January 12, 1998

1997 Ends With a Bang for Local Home Sales,

Continued Heavy Activity Likely in 1998

The San Fernando Valley residential real estate market jumped into hyperdrive last month with a stunning, uncharacteristic burst of closed escrows boosting home sales for the year to the highest level since 1989, the Southland Regional Association of Realtors reported today.

The record high for December of 1,152 single-family closed and 304 condo sales pushed the 1997 total to 14,806 closed escrows, an increase of 10 percent over 1996. Realtors working with home buyers and sellers last year generated nearly $3 billion for the local economy.

Equally stunning, the year also ended with the first increase since 1991 in annual single-family resale prices. The annual average resale price rose 3.9 percent to $225,867 and the median price posted a 3.4% gain.

AWe=re in a transitional market today even though sales are at the highest level in eight years,@ said Bud Mauro, president of the 6,000-member Southland Regional Association of Realtors.

AWith interest rates at their lowest level in more than two decades and numerous mortgage packages offering a 3 percent or 5 percent downpayment plan, buyers should be jumping in and buying with both fists,@ Mauro said. AWe=re seeing multiple offers on good listings that are in top shape, but there are certain listings that simply are not selling.@

AWhile sellers cannot dictate price, buyers have yet to realize they no longer have the edge,@ Mauro said. ABuyers do not believe that we=re moving into a sellers= market. Properties are selling at or close to list price and low-ball offers simply do not work anymore.@

Both Mauro and Jim Link, the Association=s executive vice president, expect the heavy pace set in December to continue into the new year.

December=s pending escrows B a measure of future closed escrow activity B were up a whopping 19.8 percent over November and an incredible 87.5 percent over December 1996.

AI wouldn=t be surprised to see sales go up another 5 percent in 1998,@ Link said, Aand resale prices could register an even higher gain.@

Mauro noted that activity has picked up in all price ranges, with the heaviest concentrations still in entry level homes, however, there is strong, renewed interest in the long dormant trade-up price ranges.

AThe resurgence of the trade-up market is being fueled by renewed economic activity throughout the region,@ Mauro said, Aand many buyers are returning to the Valley from the outlying areas so they can live closer to their job.@

An exceptionally low inventory of properties listed for sale appears to be the primary damper on future activity.

The Multiple Listing Service operated by the Southland Regional Association of Realtors processed 23,633 listings in 1997, an increase of 7.8 percent over the previous year. However, the year ended with only 4,768 properties listed for sale, a decline of 23.9 percent from the previous year. That total included 3,943 single-family homes and 825 condominiums.

The Southland Regional Association of Realtors is a local trade association comprised of more than 6,000 members serving the San Fernando and Santa Clarita valleys. It is one of the largest local associations in California and the nation.

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