BUSINESS SPOTLIGHT:Real estate sales follow trend

Talk of a slumping national residential real estate market may be deterring some potential buyers, but home prices in Glendale are stable, local agents say.

"On the average, the number of transactions has dropped by probably 8% to 10%, but the prices are holding," said Rick Bonyadi, president of the Glendale Assn. of Realtors and owner of Prudential California Realty. "Prices have gone up 5% to 6% in January from January last year."

The relative strength of the local market is concurrent with a regional trend, according to Jack Kyser, senior vice president and chief economist for the Los Angeles Economic Development Corp. While home prices and the number of transactions are on the decline nationally, in Los Angeles County, transactions are down, but prices are still showing strength, Kyser said.

"In the re-sale market, sales are still down but we're seeing in the region that the median price is still increasing annually," Kyser said.

Though a marked contrast to the bullish market that swept the country in the first half of the decade, the downturn in sales is not necessarily indicative of a weak economy, Kyser said. Part of what's keeping more people from buying is psychological, he said.

"Every other day you see a story in the press about the sub-prime problem, but expert researchers predict only about 1 million foreclosures nationwide," he said. "In the real estate market, that's not that many."

Many sub-prime lenders, who issue mortgages with adjustable interest rates to buyers with poor credit, have taken a nosedive this year as more and more buyers have been unable to keep up with their increased rates, Bonyadi said.

But the sub-prime woes are expected to fall mostly in areas where the average home price is considerably lower than the Los Angeles County average, Kyser said.

As of February, the county median price hovered at about $550,000, up 5% from last year, according to statistics released by DataQuick Real Estate News. In Glendale, the median was closer to $750,000, the report indicated.

But houses, old and new, are taking longer to sell than local agents became accustomed to in the last three to four years, Bonyadi said.

"We're coming back to a normal market," he said. "What we had in the past three, four years was not a normal market. The only reason the short term investment was good three, four years ago was because it was an abnormal market."