2005 Home Sales the Third Best in the Santa Clarita Valley; Annual Median Price of $564,600 the Highest Ever

The median price of single-family homes hit the $600,000 benchmark for the first time in the Santa Clarita Valley during December, even as the local home sales total from this booming sellers' market posted the third best annual tally, the Southland Regional Association of Realtors reported on Jan. 17, 2006.

A total of 3,726 single-family homes closed escrow during 2005, down 3.7 percent from the record annual high 3,869 sales concluded during 2004 in the Santa Clarita Valley. It was the third straight year that sales exceeded 3,700 and third highest figure behind the 2004 high and the 3,794 sales of 2003.

Condominium sales increased 4.9 percent during 2005 to 1,771 closed escrows, the second best year on record, the Southland Regional Association of Realtors reported. In 2004, condo sales had fallen off the record high of 1,852 set in 2003 as the inventory of properties of all types listed for sale fell to record lows.

Realtors generated in excess of $2.9 billion for the economy of the Santa Clarita Valley during 2005 – not including the millions of additional dollars paid to related industries and services that buyers and sellers need to complete a transaction, move into a home or improve a recently purchased residence.

"Demand for housing in the Santa Clarita Valley was and continues to be unrelenting," said Peggy Mueller, president of the Association's Santa Clarita Valley Division. "We fully expect this Spring and all of 2006 to be extremely busy, although even a slight drop in the pace of sales and any increase in inventory would be welcome and might relieve some of the incredible upward pressure on resale prices."

Mueller and Jim Link, the Association's executive vice president, believe interest rates that are rising from historical lows combined with a slightly slower pace of sales due to buyer reluctance in the face of record-high prices, may yield a slight decline in sales throughout 2006 compared to 2005.

Nonetheless, resale prices most likely will continue to rise at a pace slightly ahead of inflation, yet below the 20.4 percent and 26.9 percent hikes in the annual median posted in 2003 and 2004, respectively.

The median price of single-family homes rose to a record-high $600,000 in December while the annual resale price also hit a record high of $564,600.

The annual figure – which calculates the median price of all 3,726 single-family homes that changed owners in 2005 – increased by 18.1 percent. In only one of the last seven years did the annual average increase at slower than a double-digit pace.

The condominium median price did not set a record in December, however, the annual condo median resale price rose 16.6 percent to a record $356,242.

It was the fifth consecutive year of double-digit increases in the condo annual median, but the first one in four years below 20 percent. The condominium annual median resale price increased 21.3 percent in 2002, 28.2 percent in 2003 and 28.7 percent in 2004.

"Look for resale prices to continue rising, but not quite as fast as over the last several years," Link said. "Even the slightest increase in inventory, which hit rock bottom last year, will slow the increase in resale prices while giving buyers a little leverage to negotiate, a little time consider their choice."

Link and Mueller expect resale prices to continue to rise during 2006 somewhere between 5 percent and 10 percent or just slightly ahead of the rate of inflation.

"Anyone waiting on the sidelines for prices to fall is wasting their time and will be sorely disappointed a year from now," Mueller said. "While the market clearly is in transition with sales coming slightly slower, there still are far too few homes listed for sale and far too many people who are eager to buy to think prices are going anywhere but up."

That trend seems certain to continue well into the future, especially with the economy of the Santa Clarita Valley in such stellar condition and with far too few homes listed for sale.

There were 1,059 active listings throughout the Santa Clarita Valley at the end of December.

While up 16.8 percent over a year ago, that total represented a mere 3.5-month inventory at the current pace of sales and not the desired inventory of a minimum 5-month supply or more than 1,525 active listings.

The Southland Regional Association of Realtors is a local trade association comprised of more than 11,500 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.

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