2004 a Banner Year for Residential Real Estate in the

Santa Clarita Valley Even with Rising Prices, Limited Inventory

After only a few months absence, multiple offers have returned to the residential housing market in the Santa Clarita Valley following a year that was marked by record sales, record prices and an extremely limited inventory, the Southland Regional Association of Realtors reported on Thursday, Jan. 20, 2005.

In every respect, 2004 was a banner - if often hectic - year for residential real estate, a year during which local Realtors negotiated real estate transactions valued at more than $2.5 billion.

A record 3,869 single-family homes closed escrow last year, up 2.0 percent over the prior record set in 2003. It was the fourth consecutive year that sales increased.

Reflecting the effect of an extremely limited inventory, condominium annual sales fell 8.8 percent. A total of 1,689 condos changed owners last year, down from the record high of 1,852 set in 2003.

"The market was a little soft during the last quarter of 2004," said Mike Davis, the 2005 president of the Association's Santa Clarita Valley Division, "but now we're back into a situation where properly priced properties again are seeing multiple offers."

The current reality in no way resembles the crazed environment of last spring and summer where virtually every property saw five, 10 or 15 offers from prospective buyers, Davis said.

Yet demand remains so robust and inventory so tight that homes priced at or just below the most current comparable sales see immediate interest and get three, four or five offers, Davis said.

"It's a great time to be a seller," he said. "The inventory is so low that we're currently in a one-to-one situation - barely able to get one new listing for every sale. We may be short on inventory, but there certainly is no shortage of buyers."

Indeed, Davis said the inventory has drifted even lower than the figures reported at the end of December. The year came to a close with 907 active listings - a mere 2.3-month supply at the then current pace of sales. This is in a market that needs a five- or six-month inventory or a minimum of 1,970 active listings.

Jim Link, the association's executive vice president, said the local housing market - with its limited supply of new housing, which necessarily slows resale activity - has surprised him at every benchmark. over the last several years.

"Today's booming sellers' market in the Santa Clarita Valley seems unlimited," Link said. "How do you get record high sales when there is virtually no inventory and prices rise a double-digit pace?"

Link noted that the annual median price of single-family homes sold last year increased 28.9 percent - the sixth consecutive annual increase - to a record high $477,883. It beat the prior record of $376,608 set in 2003 and was the largest annual increase on record.

Likewise, the median price of condominiums sold last year increased 28.7 percent to a record high $305,408. That, too, was the largest annual increase on record, beating the prior annual high of $237,233 set in 2003.

"It used to be that buyers concerned themselves with the payment and the general location," Davis said. "Today's buyers are looking for value and the specific neighborhood they want to live in."

The year closed on a mixed note with December sales falling 16 percent, prices hitting record highs and pending escrows suggesting the market was reflecting seasonal factors.Both Davis and Link expected 2005 to be yet another exceptional year for residential real estate in the Santa Clarita Valley.

Sales will remain strong, Davis said, with the "lack of inventory the only brake on activity. Prices will continue to rise, although not at the 26.9 percent pace of 2004."

Instead, Davis expects the annual median price to rise between 5 percent and 8 percent, which would put the single-family annual median price at minimum record high of $501,777.

The Southland Regional Association of Realtors is a local trade association comprised of 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.

Southland Regional

Association of Realtors

Santa Clarita Valley

Combined Residential Re-Sale Statistics

December 2004

Southland Regional

Association of Realtors

Santa Clarita Valley

Single-Family Re-Sale Statistics

December 2004

Condominium Re-Sale Statistics