Hot/27inches/LK1st/mark2nd

By ELIZABETH HAYES

Staff Reporter

The closer to the water or the higher on a hill, the hotter the housing market in Los Angeles.

Over the past three years, as the region’s residential real estate market has heated up, neighborhoods on the Westside, particularly Santa Monica, Beverly Hills and parts of Venice, have become positively scorching.

In Beverly Hills, the median home price hit $1 million in February, up almost 63 percent from the year before, according to the California Association of Realtors. On the Westside, the median home price in February was $690,000, up almost 12 percent from the year before.

“It’s past the point of sanity,” said Andy Layman, a broker with Layman Financial in Santa Monica and president of the Beverly Hills-Greater Los Angeles Association of Realtors. “You’re starting to hear about overbids and (people) losing out on a transaction. Two or three years ago, after the earthquake, you couldn’t give property away. It’s amazing how fast people have forgotten.”

Other residential areas that have benefited are adjacent to trendy retail districts, such as Montana Avenue in Santa Monica, he said.

In some neighborhoods of Santa Monica, for example, median prices for existing homes shot up more than 21 percent between 1995 and 1997. High-end homes in the community are fetching as much as $780,000.

Even in more modest neighborhoods, a home that sold for $204,000 in 1995 now goes for an average of $248,000, according to Acxiom-DataQuick Information Systems Inc.

And the fever is not limited to the Westside. It’s also a seller’s market in parts of the San Fernando Valley particularly in Sherman Oaks, Tarzana and Encino as well as in some of the foothill communities, such as La Ca & #324;ada-Flintridge. According to the California Association of Realtors, values in La Ca & #324;ada rose 19 percent from February 1997 to February 1998, when the median price hit $453,000.

“We just had the biggest March in our history, 30 percent higher than last March,” said Mike Silvas, president of Dilbeck Realtors Better Homes & Gardens. “The high-end market is back big time. There’s no hesitation on the part of buyers.”

Brokers attribute the residential market’s strength to a variety of factors. On the supply side, fewer developers built homes in recent years as a result of the recession, leading to fewer new homes on the market.

On the demand side, consumer confidence is high, people have made big money in the stock market, interest rates remain low, demand for housing has been pent up since the recession, and the entertainment and high tech industries continue to boom.

“Higher-up businesspeople and entrepreneurs, all the people who felt uncomfortable three years ago, now feel comfortable and are buying houses,” said Steve Goddard, a broker with Remax in Manhattan Beach.

So comfortable, says Tom Carnahan, broker-owner with Carnahan & Associates in Woodland Hills, that they have no qualms about taking on a higher mortgage in pursuit of an extra bedroom or pool.

Layman agreed. “We’re seeing a lot of movement upmarket selling one home and moving to another steering growth in the upper-end market,” he said.

Beverly Hills broker Alan Long, with DBL Realtors, said he’s thrilled at the appreciation.

“It’s long overdue,” he said. “When you look at values in New York, Chicago, Palm Beach and San Francisco, we’re cheap. We’re just going to catch up with the value in the rest of the world. We’re dirt cheap.”

For example, he said, a good brownstone in New York commands between $5 million and $6 million. For the same price, a buyer could purchase a 5,000-square-foot home in Beverly Hills, complete with tennis courts, grounds and a pool.

Quality of schools can play a big role in a neighborhood’s popularity. Carnahan said he has seen a lot of interest in communities at the far western end of the San Fernando Valley that are part of the well-regarded Las Virgenes School District including Calabasas, Hidden Hills, Westlake Village and Agoura Hills. Values in those areas have risen quicker than Valley areas within the Los Angeles Unified School District.

Then there’s the perception of where you can get a good deal. The hot spots in the Santa Clarita Valley are driven by affordable prices, said Nancy Starczyk, president of the Santa Clarita Valley Association of Realtors.

“If you’re looking up to $300,000 or $350,000, we’re seeing things move quickly. New homes are doing very well,” Starcyzk said. The area is growing rapidly and attracting multitudes of young families. The median age is 32.

Bud Mauro, president of the Southland Regional Association of Realtors, said many Valley home seekers are first-time buyers for whom the price is right $250,000 or below, he said.

“It’s not as congested as other areas of L.A. and we’re still L.A.,” Mauro said. “The homes are a little newer, the lots are a little bigger and prices are less than the Westside.”