Sales of existing single-family homes in the Santa Clarita Valley increased 3.5 percent during August over a year ago as a shortage of properties listed for sale triggered multiple offers on most properties priced under $500,000, the Southland Regional Association of Realtors reported Monday, Sept. 28.
A total of 206 single-family homes changed owners last month. It was the third consecutive month that sales exceeded the 200-sale benchmark and the 14th month out of the last 16 months that the total was higher than the prior year. Condominium sales of 76 units were 8.4 percent below a year ago.
"We won't see a normal market until traditional buyers make up the majority of sales," said Nancy Starczyk, president of the Association's Santa Clarita Valley Division. Starczyk estimated that six out of ten current sales are foreclosed properties or short sales, where the asking price is lower than the outstanding loan on the property.
"We will not see a sustained recovery until the foreclosure pipeline is unclogged," Starczyk said. "There are enough ready and willing buyers out there to absorb an increase in inventory."
Many real estate experts believe that lenders will release more properties in early October after the state's moratorium on foreclosures comes to an end on Sept. 30.
For now, however, there were only 752 properties listed for sale throughout the Santa Clarita Valley at the end of August. That was down 55.3 percent from a year ago when there were 1,684 active listings.
The inventory at the current pace of sales is a mere 2.7-month supply, compared to the 6.0-month supply of August 2008. A 5- to 6-month supply represents a balanced market.
Jim Link, the Association's chief executive officer, said that the Nov. 30 sunset of the federal government's $8,000 tax credit for first-time buyers also is fueling home buyer interest.
"There are plenty of households that would benefit from the tax credit," Link said. "Some buyers are delaying in the hopes that the tax credit will be extended so that they can take advantage of any foreclosed properties that may soon come onto the market. Yet, there is no guarantee the credit will be available in December or into 2010."
Pending escrows – a measure of future resale activity – suggest that the market will remain active for months to come. There were 396 open escrows at the end of August, up 6.7 percent from a year ago.
The median price of single-family homes sold last month was $398,000, down 11.6 percent from the prior year. With more activity in the lower price ranges and budding sales in other categories, the median appears to be stabilizing. The condominium median price of $230,000 was down 14.7 percent from a year ago, but up 5.1 percent from this July.
The 11.6 percent drop in the single-family median price was a vast improvement after months of declines above 20 percent, including a record high 27 percent drop in December 2008. The moderate August number came on the heels of two consecutive months of single-digit declines in the median.
"Resale prices will not fully stabilize until all the distressed properties have worked their way through the system," Link said. "And that won't happen until the economy further improves and families have a secure income."
The Southland Regional Association of Realtors is a local trade association comprised of more than 10,000 members serving the San Fernando and Santa Clarita valleys. SRAR is one of the largest local associations in the nation.