REALTORS® completed the sale of 18,809 single-family homes and condominiums throughout the San Fernando Valley during 2003, making it the fourth best year on record, the Southland Regional Association of REALTORS® reported on January 15, 2004.

The annual total was off by only a half a percent from the 18,904 residential property transactions completed in 2002. The busiest years were 1979 when 19,964 properties sold and 1988 with 19,773 sales.

The 2003 transactions generated $7.6 billion for buyers, sellers and the local economy.

The Multiple Listing Service operated by the Southland Regional Association of REALTORS® processed 24,508 listings last year, down 8.3 percent.

All sales records would have fallen if only there had been more homes listed for sale, said Lynn Rinker, the 2004 president of the 8,600-member local professional association. Historically low interest rates keep the resale market going strong, but even the lowest rates in 40 years cannot entirely offset the impact of rising resale prices.

Selling a home made sense last year, yielding a handsome profit for most sellers, yet the high cost of buying a replacement residence even a lateral move or trade-down kept many owners in place, choosing instead to refinance and remodel.

The challenge to REALTORS® is to find properly priced properties that can be listed for sale, Rinker said. People cannot reap the benefits of home ownership or even consider trading up unless we find a way get first-time buyers into the market.

Rising resale prices limit the entire pool of prospective buyers, but first-time buyers young couples struggling to provide for their family are the ones hurt the most, Rinker said. Building housing affordable to all income groups is the major challenge facing our profession, our community and our city leaders. The ongoing economic vitality of the region depends on how quickly we come to grips with this crucial issue.

For the seventh consecutive year, the annual median price of existing single-family homes registered an increase, with every year since 1996 setting a record.
The 2003 single-family median of $375,000 was 21.3 percent higher than 2002. While five of the last six years registered double-digit increases in the annual median price, 2003 was the first time since 1988 and 1989 that the increase exceeded 21 percent.

As long as interest rates remain favorable, REALTORS® expect today’s sellers’ market to continue, said Jim Link, the association’s executive vice president. Sales may slow slightly due to limited inventory and rising prices, but sales will still hover near record levels. Resale prices will continue to rise, although not as fast as last year.

Link said he expected sales to stay at last year’s levels or fall by about 5 percent while the an increase in the median price would be more in the range of 10-15 percent range, not like last year’s 21 percent jump.

Of the 18,809 transactions completed last year, 13,878 were single-family homes. That total was 15 sales higher than 2002 and second only to the 15,263 sales reported to 1988.
The 4,931 condominiums that changed owners fell 2.2 percent from the record high of 5,041 set in 2002.

The condominium annual median resale price of $235,075 hit a record high, up 28.7 percent over 2002. It was the seventh consecutive year of increases in the condo price.
While the price of a house must be factored into any longterm plan, people purchase a home today based on the payment they can afford, Rinker said. The size of the monthly payment is dictated by their income, how much of their own money they can afford to invest and the condition of their own credit.

Low interest rates mitigate some of the impact of rising prices, Rinker said, yet it’s essential to buy only what you can afford to keep over a longterm. A home has intrinsic value, but the payment must be affordable, even when some of life’s bumps come along, like losing a job or a downturn in the economy.

While an estimated 120,000 potential buyers are knocked out of the market for every increase of 1 percent in interest rates, neither Link nor Rinker expected interest rates to rise soon or, even if rates did rise, to increase high enough to weaken the market.

Rates won’t significantly slow sales unless they rise higher than 7.5 percent, Link said. No one is predicting that kind of increase anytime soon.

December 2003 ended on a high note with single-family sales up 7.3 percent to 1,188 transactions. Condo sales increased 4.1 percent to 411. Records were set in every price category with the monthly median price of single-family homes rising in December to a high of $413,000. December pending escrows a measure of future resale activity were strong even as they followed seasonal patterns by falling 4.8 percent from a year ago.

The Southland Regional Association of REALTORS® is a local trade association with more than 8,600 members serving the San Fernando and Santa Clarita valleys. It is one of the largest local associations the nation. Go to www.srar.com to search for every home listed for sale in the San Fernando and Santa Clarita valleys.