Sales of existing single-family homes increased compared to the prior year for the 12th consecutive month during July and resale prices continued to stabilize, the Southland Regional Association of Realtors reported on Thursday, Aug.20.
A total of 745 homes closed escrow, up 3.9 percent from a year ago, but down 3.9 percent from the June tally – breaking a string of five consecutive month-to-month gains in sales. The 203 condominiums that sold last month were only two transactions below a year ago, but 14 percent below the total reported this June.
"There simply are not enough properties listed for sale to satisfy demand," said Ana Maria Colon, president of the Southland Regional Association of Realtors.
"Virtually every property listed under $500,000 is seeing multiple offers, sometimes totaling dozens of competing bids that drive the purchase price above the list price," she said. "The winner often comes in with an all-cash offer."
The Association reported a total of 3,278 active listings at the end of July – down 52.8 percent from the 6,950 listings of July 2008. At the current pace of sales, that represents a mere 3.5-month supply compared to the 7.5-month supply of July 2008. A five- to six-month inventory reflects a balanced market.
"Inventory is down by half from a year ago, which is why sales have slowed on a month-to-month basis," said Jim Link, the Association's chief executive officer. "Still, increased activity in higher price ranges is encouraging and we're seeing further evidence that prices have hit bottom and that the market is stabilizing."
The median price of the 745 single-family homes sold last month was $400,000, up 6.7 percent from the June median, but down 8.0 percent compared to July 2008.
It was the first single-digit decline and the smallest drop since the median started falling in October 2007. Only two price declines have been smaller: the 3.3 percent and 6.3 percent drops posted when the price slide began in October and November 2007, respectively.
Single-family prices started firmed up since hitting the low point of $339,900 this February.
The condo median price of $228,000 was down 18.6 percent from a year ago and up 0.9 percent from this June. It was the third consecutive month-to-month increase since the condo median hit its low water mark of $185,000 in May. While still hefty, the 18.6 percent annual drop marked the first time the decline had been below 20 percent since February 2008.
Pending escrows – a measure of future resale activity – continued to post positive numbers, but much lower than in recent months, further supporting the contention that the lack of listings is impeding recovery.
There were 1,259 open escrows at the end of July, up 10.3 percent from the 1,141 pending escrows reported in 2008.
That was the smallest percentage gain so far this year. While sales typically wane as summer draws to an end, July's increase is dramatically lower than the 20-60 percent increases in pending activity seen virtually every month since January.
"Prices are reasonable, interest rates are favorable and everyone wants to take advantage of the current tax rebate," Colon said. "The new challenge to buyers and their Realtors is to figure out how to be first at a new listing and how to make their offer stand out in the crowd."
The Southland Regional Association of Realtors® is a local trade association with more than 10,000 members serving the San Fernando and Santa Clarita valleys. SRAR is one of the largest local associations in the nation.