Uptick in Volume May Not Presage Rising Prices

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The number of Los Angeles County homes sold in April was 3,745, a 10 percent gain compared with March, after adjusting for the number of selling days per month, according to HomeData Corp. in Hicksville, N.Y. The average price for pre-existing family homes was $340,000, a gain of 3 percent over the previous month.

But Perry Wong, senior economist at City National Bank, said the increased volume doesn’t mean prices will climb in Los Angeles in the near term.

“It would be too quick to say that because volume is growing, prices will rise,” he said. “It’s not the right time to make that call because we are in the first months of the high-activity season.”

In the year-to-year comparison, volume fell 10 percent and prices dropped 3 percent. The government stimulus program, designed to boost home-buying activity, was still in effect a year ago, so that accounts for some of last year’s higher numbers.

In a normal real estate market, home sales rise in the summer as families move before children start the school year in fall. Craig James, owner of Hilltop Real Estate Inc. in Glendora, said that pattern didn’t play out during the last few years as other factors – such as price deflation and credit availability – affected the market. But this year, he is seeing increased home-buying activity among families and fewer distressed properties, both signs of a stabilizing market. He said most of his sales are in the $400,000-$500,000 range.

Thomas Carnahan, broker at Carnahan & Associates in Woodland Hills, believes the market has reached bottom and will begin a long, slow recovery.

“The under-$400,000 properties have gone up in value during the last 12 months, and that says we have reached bottom,” he said. “Right now the toughest sector is the $450,000-to-$750,000 range, the so-called move-up market. We don’t have a lot of people selling their homes to move up. The upper end of the market is slow as well.”

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