Southern California is on its way back from economic hell.
Sales of Southern California homes worth less than $175,000 are up in the January-to-May period compared with the 1993 quarter, according to TRW Redi Property Data, Riverside, Calif.
Nima Nattagh, a TRW market analyst, said sales growth in this price range is the first step in a broader real-estate market recovery in California.
Economists have blamed much of the Golden State's financial woes on a shoddy real estate market. And mortgage lenders have been among those suffering most severely.
Hope Elsewhere, Too
TRW Redi data suggests that other real estate markets, like southern Florida and greater Chicago, are also rebounding -- although few regions have experienced a recession as numbing as California's.
From January 1993 to May 1993, houses in southern California worth less than $175,000 accounted for 51.5% of home sales, according to TRW. In the same period this year, those homes made up 53.3% of sales. Home SalesNumber of new andexisting homes sold 1993 1994Calif. counties Jan.-May Jan.-MayLos Angeles 26,717 31,652Orange 10,742 14,308Riverside 7,445 9,712San Bernardino 7,577 9,284San Diego 9,713 12,369Ventura 3,195 3,775 Jan.-April Jan.-AprilSouth Florida 22,392 26.961 Jan.-March Jan.-MarchChicago metro 19,956 24,256
Mr. Nattagh said the purchasers were mainly lower income or first-time homebuyers.
"As far as the California real estate market is concerned, we can say with a good degree of certainty that it has turned around," he said.
He said the construction sector, which has shown new life, has played a major role in the turnaround.
"We feel better about the southern California market," said Brenda Lynn, executive vice president, loan production, Plaza Home Mortgage Bank, Santa Ana, Calif.
But Ms. Lynn added, "It's going to be a slow road."
She said Plaza has seen more home-purchase activity, especially among first-time homebuyers. But she said Southern Californians are not eager to buy more expensive homes.
Production Reported Down
Norman Anderson, senior vice president, Directors Home Loan Corp., Riverside, Calif., agreed that mortgage purchases were up in Southern California. But he emphasized that overall production is off - 50% in Directors' case.
Mr. Anderson expects production to improve in the fall.
"Thank God we have got that to look forward to," he said.