Home Prices Rise Again, but Sales Are Softening

Home sales in Los Angeles and Orange counties retreated in September, but prices maintained their sizzling pace of growth, according to the first statistical report of the region’s housing market after the terrorist attacks.

The report by DataQuick Information Systems Inc. showed that sales of new and existing homes last month fell 6% in Los Angeles County and more than 10% in Orange County. That came after double-digit percentage gains in combined sales for July and August in both counties.

The September report, however, showed home sales were softening in the days before the attacks, and there was not a sudden drop-off right after the events of Sept. 11. DataQuick’s report is based on escrow closings, which reflect sales agreements made during the previous 30 to 60 days.

But on the industry’s front lines, brokers, escrow agents and appraisers pointed to growing signs that the hot housing market in the region is losing some of its steam in the wake of the attacks.

In the last two weeks, Orange County appraiser David Wilson said homes opening escrow were generally valued slightly lower than comparable homes that have recently been sold. The owner of Southwest Real Estate Services in Orange said the market has peaked and probably will not rise again until consumers feel more confident about the economy.

“I don’t see a spike in prices anymore,” said Bob Kurz, an agent at Grisham-Joseph Century 21 in Whittier.

Through September, prices appeared to be holding fairly firm. DataQuick’s report showed that the median price of all homes sold last month in Los Angeles County surged 12%, to $231,000. In Orange County, the median price stood at $305,000--a 10% increase from September of a year ago.

DataQuick said it was the seventh month in a row that prices grew by double-digit rates in Los Angeles County, and the 20th consecutive month of such growth in Orange County.

“There’s not that much we can determine that’s changed,” said DataQuick analyst John Karevoll, who compiled the report. “The anticipated slowdown in the market hasn’t shown up yet.”

But most analysts nationally are expecting a deepening slowdown in housing, as unemployment increases and consumers cut back on major purchases. And it appears unlikely that the Southland will escape the broader trend.

At Atlas Escrow Corp. in Anaheim, escrow officer Edith Bergquist said closings were down 10% in September from a year earlier. The number of new escrows from mid-September through mid-October have “dropped considerably,” she said.

Brokers said the uncertain climate has prompted more homeowners to put their properties on the market--and that might lead to a softening of prices.

Richard Daskam, an agent at Century 21 Sparow-Shoreline in Long Beach, said he has five listings in October so far, compared with a usual month of two.

“We’re going to see more negotiation of sales prices,” Daskam said.

By historical standards, supplies remain low, especially of lower-priced homes.

As an example, Kurz, the Whittier agent, said that a Buena Park condominium he listed for just under $200,000 elicited an offer at full price this past weekend. In general, first-time buyers, spurred by falling mortgage rates, are still eager to buy homes. But more affluent customers are taking longer to decide whether to purchase, he said.

At the current sales pace, the supply of unsold existing homes is 2.9 months in Los Angeles, a record low, the California Assn. of Realtors said. It’s not much better in Orange County, where a 2.4-month supply is a near record low, the group said.