By Don Jergler Home prices throughout the Southland - especially in the San Gabriel Valley and Whittier areas - have soared over the past year in most cities. Already pricey San Marino and South Pasadena saw 25-percent and 41-percent increases, respectively, in prices for existing homes from February 2002 over the year prior, according to a report released last week by the California Association of Realtors. Prices for homes in La Verne rose almost 43 percent, from $210,000 to $300,000, during that period, according to the report. But other cities, such as Baldwin Park, Glendora and Rosemead, saw minimal increases in average housing prices over the past year. Arcadia, in fact, saw a 4.6-percent decrease in the average price of a home during that period, from $377,500 to $360,000. Why? The answers are simple, experts said. "Think of it as a cascade effect," said Raphael Bostic, director of the Casden Real Estate Economics Forecast at the University of Southern California Lusk Center. "Housing in certain segments of the market becomes hot, and as those segments of one city fill in, then home buyers move to the same segment in other cities. What your seeing is basically a wave of purchased homes in some cities all in the same segment. In those areas, the supply of that housing has become increasingly limited." And each area has its own story. "In Arcadia last year, higher value houses were being sold," Bostic said. "And this year the middle-class and working-level house - basically your starting house - is the main type of property that's being moved into in Arcadia. And that's what brings the price down." In the opinion of Marty Rodgriguez, owner of Century 21 Marty Rodriguez in Glendora, it's all a game of catch-up. "Those other markets had (already) gone up so much higher," Rodriguez said. "Now, the gap between Glendora and La Verne has closed in." And once the Foothill (210) Freeway is completed to the Inland Empire, prices in San Bernardino County will start to catch up with housing prices locally because first-time buyers will have access to more affordable property and a more manageable commute, Rodriguez said. "You'll find the difference between here and Rancho Cucamonga will also be closer," she said. Statewide median home prices rose nearly 20 percent, while sales of homes increased 25 percent, according to the report. Realtors credit the surge in housing sales to lowered interest rates. Leslie Appleton-Young, chief economist for the California Association of Realtors, offered another reason why home prices in some areas were flat compared to others. "You may be selling more less-expensive homes," she said. "And I think we do have a market where the entry-level end of the market is just absolutely booming." Despite the reasons for the variances, homeowners can expect to continue to see prices go up, Appleton-Young said. "I don't think we're going to continue to see as massive an increase as we did the first two months, but I do think the year 2002 is going to be surprisingly strong," she said. "I think the public has positive confidence about the future and I think they see economic recovery on the horizon."
March 31, 2002