ANN WISHART, Valley Press Business Editor

February 23, 2005

Home Prices 'bubble' on up

PALMDALE - January's median price of resale homes in the Antelope Valley, hovering between $209,000 and $358,000, is quite reasonable, says a real estate expert, compared to December's median price of a resale home in the rest of the state: $474,480. "We still have relatively affordable housing here," said Rick Little, senior vice president and real estate loan manager for the Antelope Valley Bank Division of California Bank and Trust.

-

Prices of existing homes sold in the Valley have risen faster in the last year than in the rest of the state. DataQuick Corp., which gathers real estate information nationally, shows home sale prices in the Palmdale-Lancaster area rose between 18% and 60.8% from January 2004 to January 2005, thanks to a number of factors. "We have a pent-up housing demand," Little said.

-

A growing number of home buyers are migrating to the region from the San Fernando Valley and Los Angeles basin, willing to brave long commutes to own a spacious home here, Little said. Many have sold properties "down below" and have cash to invest in more-for-their-money homes in the Valley. Their willingness to meet rising prices keeps prices rising.

Little said the housing bubble might not pop for five or 10 years and, as long as the Fed's policy is in place, the real estate market is fairly stable. The median price of an existing home in California in December increased 18.1%, and sales increased 1.4% compared with the same period a year ago, the California Association of Realtors reported recently. "Homebuyers concerned about future mortgage-rate increases flooded the market in December, driving the median price to an all-time high of $474,480," said association president Jim Hamilton.

-