SFV Home Sales Trending Up

Homes are selling in the San Fernando Valley with activity gradually picking up on a month-to- month basis and the number of properties in escrow suggesting the trend will continue through the coming months, the Southland Regional Association of Realtors ® reported.

A total of 41 6 single-family homes changed owners during March, up 16.2 percent from February. While sales were down 46.0 percent from a year ago, activity has been trending up since October with March being the third consecutive month of increased resale activity.

" If this trend continues," said Mary Funk, president of the Association, "it suggests that we may have passed the bottom of this cycle with the worst behind us."

Pending escrows, a measure of future activity, supported that perspective: down from a year ago, but up from month-to-month. There were a total of 853 transactions in escrow at the end of March, a mere 4.6 percent lower than a year ago, yet up 12.4 percent from the February tally.

The Association also reported 151 condominium sales during March. That was down 53.4 percent from March 2007, but up 42 transactions or 38.5 percent from February. March also marked the third consecutive month of increased condo resale activity."After flatlining late last year, the patient most assuredly is showing a pulse," said Jim Link, the Association's chief executive officer. "We're witnessing a slow, steady increase in activity that .seems likely to continue to gain momentum."

Link and Funk agreed that any increase in sales is likely to come at a slower pace than might be expected because of the presence of foreclosures, which take longer to close escrow than a traditional home sale.

Bank-owned properties may present an opportunity for buyers - although prices declines are not nearly as steep as some buyers expect - but Link and Funk said buyers who focus solely on foreclosures may well be missing other opportunities.

"Negotiating with a motivated seller, whose home is priced competitively from the beginning, may yield a superior bargain and a faster, smoother escrow than a foreclosure," Link said. "Plus, the condition of the home in a traditional purchase often is better than in foreclosures, which typically are sold ‘as is,' offering zero opportunity to negotiate for repairs or concessions in price."

Resale prices continue to react to the triple impact of today's larger inventory, the presence of foreclosures, and the simple reality that resale prices rose too quickly during the early years of this decade.

The median price of single-family homes sold during March was $475,000, down 21.0 percent from 12 months ago and off 10.5 percent from this February. With few exceptions, the median has been sliding every month since hitting the record high of $655,000 in June 2007.

The condominium median price stood at $31 5,000, down 21 .1 percent from a year ago and off 4.5 percent from February. It, too, has been sliding for many months, although it hovered for quite some time near the record high of $41 5,000 set in February 2006.

"It will take some time for foreclosure to work their way through the system and only then will prices stabilize," Funk said. "However, with each sale, the negative impact of foreclosures on prices will decrease."

While the inventory of homes is dramatically higher than the less than one-month supply common during the boom market, it is nowhere near the record levels set during the national recession of the early 1990s.

A total 7,193 properties were listed for sale throughout the San Fernando Valley at the end of March. That was up 26.6 percent from a year ago and 1.5 percent higher than February.

At the current pace of sales, the inventory represents a 12.7-month supply - clearly a buyers' market, but well below the 20 plus-month supply seen during the early 90s.