San Fernando Valley Home Sales Jump 78%

For the fifth consecutive month, sales of existing single-family homes in the San Fernando Valley improved over 2007 totals with the 633 closed escrows of this November up 78.3 percent from a year ago, the Southland Regional Association of Realtors^® reported.

Total single-family transactions this year already exceed all of 2007, although 2008 will still rank as the second slowest year for sales on record even if December exceeds expectations.

Condominium sales also increased over November 2007, up 41.1 percent with 199 closed escrows. It was the third consecutive month that condo sales improved over year-ago totals.

"Anyone with cash is in a great position to take advantage of excellent home-buying opportunities," said Mary Funk, president of the Association. "Many more people are eager to buy, but the credit market continues to be a roller coaster with lenders changing underwriting rules every day.

'Tighter lending standards tend to shut prospective buyers out of the market, even those with a first-rate credit history and a solid income," Funk said. "A few of the short sales are coming off the market as some banks are starting to restructure loans, but otherwise the $700 billion taxpayer bailout has yet to trickle down to help distressed home owners or buyers who need a home loan."

Sales activity has been picking up over recent months as prices continue to fall, down 32.7 percent from a year ago to this November's median resale price of $375,000 - a number not seen since 2003. For comparison, the record-high single-family median price of $655,000 was set in June 2007.

The condominium median price of $220,000 was off 41.3 percent from a year ago when it stood at $375,000. The condo record high median of $41 5,000 was set in February 2006.

"Sales bottomed out during the fourth quarter of 2007 with lower prices bringing buyers out and fueling demand, but the market will not improve dramatically until the economy stabilizes and the credit market loosens up," said Jim Link, the Association's chief executive officer.

"A drop in the inventory of homes listed for sale suggests that owners who do not have to sell are not putting their house on the market, which makes a lot of sense," he said. "Also, the drop in inventory shows that as foreclosed properties are sold they are not being replaced as quickly."

There were 5,598 active listings throughout the San Fernando Valley at the end of November, a number that was down 25.4 percent from year ago totals. The inventory also declined on a month-to-month basis, down 5.4 percent from this October.

At the current pace of sales, the inventory represents a 6.7-month supply -- on the high side of the 5- to 6-month supply that real estate experts believe represents a balanced market.

During the boom years the supply frequently hovered at less than a 1 -month supply while during the recession of the 1990s it soared to a record-high 23-months. During this cycle, the inventory peaked at a 16.2-month supply this January and has been declining ever since.

While seasonal factors, tight credit and continued fears about the economy appear to be tempering resales, pending escrows - a measure of future sales activity - support reports that buyers have returned.

There were 951 open escrows throughout the San Fernando Valley at the end of November.

That was up 70.1 percent from a year ago as the market hit its low point in October 2007.