A.V. home prospects still bright

first_img So far, Antelope Valley home prices show no signs of collapsing. Because they were so low to begin with, valley median prices have been going up faster than those state and countywide, but prices remain among the lowest in Southern California. Median home prices in Palmdale for both new and previously owned homes went up in October to a record $350,000, up from $344,250 the previous month and 29.4 percent higher than a year ago, according to statistics released this week by the California Association of Realtors. In Lancaster, the median price last month hit a record $302,000, up from $301,235 in September and 29.1 percent ahead of a year ago. In Rosamond, the October median price was $270,000, the same as the record set in July and 28.8 percent ahead of a year ago. California City’s median price hit $194,000, up 32 percent over the year. Statewide, the median price for a previously owned home was $538,770, up 17.2 percent from a year earlier but below the peak of $568,730 set in August. PALMDALE – Three times since World War II the Antelope Valley has gone through housing booms. The late 1950s’ and late 1980s’ booms ended with defense industry cutbacks and real-estate busts, which sent prices plummeting and left homes sitting vacant. With Lancaster and Palmdale median-home prices now four times what they were in 1999, how and when will the present boom end, and what will happen to home prices? “I think they’re going to continue to escalate at least in the next few years,” said appraiser P. Scott Voltz, a principal of Southern California Real Estate Counselors Inc. “The tea leaves right now look like real estate is going to stay strong.” More than 5,600 new homes are expected to be issued construction permits this year in the Antelope Valley, up more than 60 percent from last year. This year’s home construction is expected to be more than the total home building from 1996 through 2000, according to the 2006 North Los Angeles County Real Estate and Economic Outlook report released last month. Voltz, who spoke to local business and civic leaders Tuesday at an Antelope Valley Board of Trade luncheon, objects to the term “bubble” applied to real estate prices. “There really is no such thing as the real estate bubble … but there really will be fluctuations in the real estate cycle, affected by supply and demand,” Voltz said. Remarking that he is “really sticking my neck out” making a prediction, Voltz said he expects prices to continue to go up, for a combination of factors. “Low interest rates, very easy credit and a surprisingly strong economy have created this perfect storm,” Voltz said. The post-World War II baby-boom generation provided the biggest group of first-time home buyers in history, and they are still in the housing market with the arrival of an even bigger group from Generation X, whose oldest members are entering their 40s, he said. In the 60-mile radius around downtown Los Angeles live 17 million people – a population more than any state except California, New York and Texas – and over the next 20 years the Southern California Association of Governments expects 5.8 million more – equivalent to creating two Chicagos. While some worry about easy lending practices putting people in homes they will lose to foreclosure if prices drop, the lenders are willing to take that risk, Voltz said. “They perceive we’re not in a bubble. We’re in a permanent step-up in prices,” Voltz said, like Southern California home prices went through in the 1960s and 1970s. Greater Antelope Valley Association of Realtors President Jodie Shepherd of 1st Choice Real Estate in Palmdale also doesn’t see local home prices as a bubble ready to burst. Resale home prices in November have leveled off, she said, but most likely because of the normal slowdown in people shopping for homes at holiday time and the increase of homes on the market. Sellers this month have begun dropping their asking prices, frequently because they originally concluded they should price their homes tens of thousands of dollars more than what a neighbor’s home just brought, Shepherd said. “We’ve leveled off and we adjusted a little bit. The market’s starting to become more normal,” Shepherd said. Voltz said home prices could fall if conditions change. That could mean the Federal Reserve tightening up too greatly on the money supply, causing interest rates to rise and businesses to cut back and lay off workers; loan companies tightening their easy financing plans, or cutbacks in defense spending, though none are on the horizon, Voltz said. “Nobody has a crystal ball … it will turn when it turns,” he said. Charles F. Bostwick, (661) 267-5742 [email protected] 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img