San Fernando Valley Home Sales Show Improvement

Home sales in the San Fernando Valley continued to fall compared to year ago levels but not at as fast a rate as in recent months and, for the first time in months, the number of homes sold in creased on a month-to-month basis, the Southland Regional Association of Realtors® reported.

A total of 358 single-family homes closed escrow throughout the Valley during February, a drop of 31.9 percent from the tally reported in February 2007. For comparison, the year-to-year declines for December and January were 51.6 percent and 43.2 percent, respectively.

However, the February sales total increased 10.8 percent compared to January, supporting reports from Realtors^® in the field that buyers are returning to the market and activity is picking, even if only slightly.

"Sales typically drop during the winter and pick up as Spring approaches, but this has not been a typical winter so any increase in activity could portend a renewed faith in the local housing market," said Mary Funk, president of the Southland Regional Association of Realtors^®. "Buyers realize how much power and opportunity they have in this market. They see home loans at attractive interest rates. They see the best selection of homes for sale in years. They see the government taking steps to alleviate the problems in the financial markets.

"Combine all the factors," Funk said, "and it's easy to see why some people believe that now is the time to jump back into the market, that now is the time to buy a home, before the tide turns, before they have to compete with many more buyers."

While year-to-year declines remain at high levels, a similar pattern emerged during February regarding sales of existing condominiums.

A total of 109 condos changed owners during February, down 50.0 percent from February 2007. Sales declines for condos have been in the 50 percent range for each of the last three months. However, condo sales during February posted a 3.8 percent increased compared to January of this year.

"It may take many more months to work out all the problems caused by the collapse of the sub prime mortgage market and the mistakes made by buyers who purchased beyond their means," said Jim Link, the Association's executive vice president. "But clearly there is movement and improvement and maybe, just maybe, the worst is past."

Link and Funk noted that prices remain soft although the median is not falling as fast or as deep as some people expected.

The median price of the 358 homes sold during February was $525,000. That was down 13.9 percent from a year ago, but up 5.0 percent from the January figure. It was the first slight uptick in prices since prices started sliding in August. Resale prices are now hovering around 2005 levels.

The median price of condos sold last month was $330,000, down 17.5 percent from a year ago and 10.3 percent lower than the January median. Condo prices have been on a steep slide that started in November.

Pending escrows also lend support to the idea that there is renewed activity in the resale market.

There were 759 open escrows throughout the San Fernando Valley at the end of February. That was down 28.3 percent from a year ago, but increased 18.2 percent from the January total.

The inventory of homes for sale also runs counter to what some people believe. There were 7,090 active listings at the end of February, up 13.3 percent from February 2007. Of that total, 5,226 listings were single-family homes - 74 percent of the total - and 1,864 were condominiums.

At the current pace of sales, the inventory represents a 15.2-month supply - clearly a buyers' market, but still not at record high levels that exceeded a 20-month supply back in the national recession of the early 1990s.