2004 was an exceptional year for residential real estate throughout the San Fernando Valley despite a double-digit increase in the median resale price and an extremely limited inventory, the Southland Regional Association of Realtors reported on Thursday, Jan. 19.

Even though activity fell 3.3 percent from the 2003 total, the 18,187 single-family homes and condominiums that changed owners ranked as the third busiest year since 1988. The record combined sales total was set in 1979 when 19,964 properties changed owners.

Realtors negotiated sales of existing home that generated nearly $9.8 billion for the economy of the San Fernando Valley – not including the additional millions buyers and sellers spend on related products and services ranging from new furniture, washers, and dryers to construction, painting and yard services.
A total of 25,057 properties were listed last year on the Multiple Listing Service operated by the Southland Regional Association of Realtors.

“2004 was a benchmark year for residential real estate,” said Jim Ezell, the 2005 president of the Association, whose 9,600 members serve the San Fernando and Santa Clarita Valleys.

“It will be remembered as the year when a limited inventory triggered months of madness with virtually every home receiving an offer from five, 10 or even 15 prospective buyers,” Ezell said. “Gratefully, that frenzy is gone, the market now appears to be much more normal and not nearly as tilted in favor of sellers as it was last year.”

As predicted early in 2004, single-family home sales fell 4.3 percent to 13,283 making it the third best year since the record 15,263 homes sold in 1988.
Condominium sales of 4,904 units were less than 1 percent below the 2003 figure. The record high was set in 2002 when 5,041 condos sold.
Sales hovered just below record levels throughout the year even as resale prices soared to record highs. The annual median price of single-family homes that changed owners last year was $473,750, up 26.3 percent over the prior record set in 2003.

Likewise, the annual condominium median price jumped to a record high $298,500, up 27.0 percent over the prior record.

“We fully expect 2005 to be another exceptional year for residential real estate,” said Jim Link, the Association’s executive vice president. “Low interest rates will continue to drive sales, however, we do not see prices escalating at the same pace, which is good news, especially for moderate income buyers who are rapidly getting priced out of the market.”

Ezell and Link agreed that 2005 sales activity will hover near or slightly below the same levels of 2004. Resale prices most likely will rise somewhere between 10 percent and 15 percent rather than 26 percent seen last year.

“First-time buyers will always jump on whatever is available,” Ezell said, “There’s always somebody grabbing at the first rung of the real estate ladder.”
Even though the number of properties listed increased 58.7 percent during December, the inventory of available homes remains at critically low levels. The 2,815 active listings represent a mere 1.8-month inventory at the current pace of sales. That compares to the 5- to 6-month inventory – or more than 7,900 active listings – real estate experts believe represent a balance market.

The year closed on a relatively strong note with single-family sales following seasonal patterns by dropping a modest 3.0 percent to 1,152 closed escrows. The December total was up 6.1 percent from November, suggesting that the market remains exceptionally strong even with record high prices. Condominium sales during December increased 8.5 percent to 446 sales.

Pending escrows, a measure of future resale activity, increased 8.0 percent over a year ago. It was the second consecutive increase in the pending escrow total following nine months of declines.

The Southland Regional Association of Realtors® is a local trade association with more than 9,600 members serving the San Fernando and Santa Clarita valleys. SRAR is one of the largest local associations in the nation. Go to www.srar.com to search for every home listed for sale in the San Fernando and Santa Clarita valleys.