Seasonal Factors Dampen SFV Home Sales

Seasonal factors resulted in slower homes sales in the San Fernando Valley during January, the Southland Regional Association of REALTORS® reported.

REALTORS® assisted the close of escrow on 569 single-family homes last month, a total that was down 2.2 percent from a year ago and, following seasonal patterns, 29.4 percent below the December tally.

Additionally, the 211 condominium sales last month were 8.3 percent below a year ago and 29.0 percent lower than the December total.

“Typically, January is the slowest month of every year as closed sales are, for the most part, escrows opened from mid-November through December, the holiday season,” said Winnie Davis, president of the Southland Regional Association of REALTORS®, which serves the San Fernando and Santa Clarita Valleys.

“The decrease in sales from last year is consistent with the trend we saw throughout most of 2006,” Davis said.

The median price of the homes sold during January was $613,000, a gain of 1.3 percent over a year ago and unchanged from the December median. The condominium median price of $380,100 was off 2.5 percent from 12 months ago and 3.8 percent below December.

Both figures hover near the record highs of $625,000 established in June of last year for single-family homes and the high for condominiums of $415,000 set in February 2006.

“We’ll have a better barometer of how the year will go after the first quarter,” said Jim Link, the Association’s executive vice president, “Sales will gradually pick up as buyers accept the fact that prices are continuing to rise.

“REALTORS® are reporting that interest among buyers is already picking up,” Link said. “Buyers realize prices are not dropping, and also want to lock in today’s low interest rate on a home loan.

A total 5,207 properties were listed on the Multiple Listing Service operated by Southland Regional Association of REALTORS®. That was up 25.5 percent from January 2006 and only somewhat below the December total.

At the current pace of sales the 5,207 inventory represents a 6.7-month inventory – still within the 5- to 6-month benchmark regarded as a balanced market where neither buyers nor sellers wield excessive negotiating power. During the peak of the recent sellers’ market the inventory frequently lingered below a 1-month supply.

“Buyers are sorting through a large enough inventory to offer real options in all price ranges, but not so large that it tips the balance in their favor,” Link said. “Some people incorrectly believe the inventory is huge, yet every increase seems dramatic after years of being near zero. Today’s inventory would have to double again before we had a pure buyers’ market.”

Pending escrows – a measure of future resale activity – were off 9.4 percent from a year ago, but increased 23.1 percent from December, which also followed typical seasonal patterns.