Prices fell even though single-family house sales in the Valley rose 12% last year, and through April sales were running 22% above last year’s pace. And then, she says, “It’s going to be a slow and gradual ride back up the mountain.” McKinley, who has been helping homeowners hurt by the quake, doesn’t see Valley housing prices rebounding until the end of next year. “We haven’t seen the bottom of prices fall out yet,” says Catherine McKinley, a real estate consultant in Newhall and a former vice president at Pasadena-based Countrywide Funding, the nation’s largest mortgage lender. The median price is the point at which half the houses sold cost more than $179,000 and half cost less. In April, house buyers in the Valley paid a median price of $179,000, down 12% from $204,000 a year earlier. The drop in the median price has been even more severe. Through April of this year, the resale price of an existing single-family house in the Valley averaged $230,080-down 9% for all of last year, and down from a peak of $296,675 in 1990, says the San Fernando Valley Assn. Banks don’t want foreclosed properties on their books, so they often dump them at fire-sale prices, which keeps driving down prices. And Valley foreclosures were up 38% in the first quarter of this year, compared to the same period in 1993. Last year lenders repossessed a record 3,650 single-family houses and condominiums in the Valley-20 times more than in 1990, according to TRW-REDI Property Data in Riverside. But when they do, they will add to an already-overabundant supply of recession-triggered foreclosures in the San Fernando Valley, which has helped drive down Valley housing prices to 1988 levels. “We’re bracing ourselves.”įoreclosure proceedings typically take four months, so many quake-damaged properties repossessed by banks won’t hit the market until late summer.

“It’s absolutely going to come,” Prechtl says. Through April this year, he’s sold another 75 properties, and he expects the new wave of foreclosures from the earthquake to keep him busy until at least the end of next year. His office grossed $750,000 in commissions, from which Prechtl pays out big overhead expenses. Prechtl, 33, had his best year ever in 1993, selling about 140 houses, more than half foreclosures. “The pipeline of foreclosures is beginning to fill up again,” Prechtl says. Most lenders gave homeowners with quake damage a three-month break on mortgage payments, but that moratorium has expired, and banks are starting to serve default notices, so other borrowers are walking away from their homes. These days Howard is on the move a lot, and his workload is about to get heavier.īack in Prechtl’s office, a team of four others is fielding a flood of price requests from banks on houses soon to be foreclosed-many of them properties damaged by the Jan. Howard checks properties for Ron Prechtl, a real estate agent at Century 21 Lamb Realtors in Northridge who specializes in selling foreclosed properties for lenders.

Next wave of mortgage defaults