California Home Sales Up Despite Spate of Disasters
DESPITE a litany of disasters in Southern California - from urban unrest to fires to floods in 1993 - a strong performance in home sales during the second half of 1993 has led to projections of increased home sales in California in 1994.
And because full-year home sales increased in 1993 in virtually every region of the state, the positive momentum and increased buyer confidence is expected to be slowed only minimally in Southern California by the devastating earthquake that hit Los Angeles on Jan. 17.
``Outside of the areas directly hit in the San Fernando Valley, the state real estate market is doing quite well,'' says Leslie Appleton-Young, vice president of research and economics for the California Association of Realtors (CAR). ``We feel the momentum generated at the end of last year will continue even with the uncertainty generated by the quake's devastation.''
CAR projects that housing sales will increase 2.4 percent this year to a level of 448,140. Initially, the organization had anticipated a 2.4 percent decline in sales.
The 1994 forecast upgrade, announced last week, was tied to recent improvements in consumer confidence, durable goods orders, and a rise in the United States Commerce Department's Index of Leading Economic Indicators. Housing affordability has also been enhanced by low mortgage rates and favorable housing prices. A statewide decline in job losses also was cited.
``The recent increase in the federal funds rate for the first time in five years may signal a turning point,'' Ms. Appleton-Young says. ``We think that will bring a new urgency to those on the verge of buying.''
CAR reports that home sales totaled 437,710 in 1993, up 2.2 percent from 1992, when a revised 428,170 houses were sold. The increase is the second consecutive year that sales of homes have risen. The median price for a home declined to $188,870 in 1993 from $197,360 in 1992, according to CAR. And the organization says the level of unsold, single family homes declined in 1993, largely because of a drop in listings, compared with 1992.
Condominium sales fell 17.7 percent in 1993 from 1992, while the median price dropped 3.9 percent to $140,100 in 1993 from $145,790 in 1992.