Home sales during November throughout the Santa Clarita Valley were down from a year ago and 2009 will barely match 2008 totals – not for lack of buyers, but because of an extremely limited inventory, the Southland Regional Association of Realtors reported on Tuesday, Dec. 28.
Listings fell 45.0 percent compared to a year ago with a total of 818 active listings throughout the Santa Clarita Valley. That represents a mere 3.5-month inventory compared to the 6.4-month supply of a year ago November. Experts believe a balanced market emerges when the inventory hovers between a 5- and 6-month supply.
"Today's market is not straightforward with inventory, sales totals and declining median prices not telling the full story," said Nancy Starczyk, president of the Association's Santa Clarita Valley Division, noting that the inventory is even tighter than it appears because many of the listings are bank-owned or short sales that already have offers pending.
"There are plenty of buyers out there, especially in the lower price ranges, but the low inventory and problems getting loans make it difficult to get them into a home," Starczyk said. "The median price is down from a year ago, yet a closer look shows prices firming up and actually rising on entry-level homes due to competition that sometimes has dozens of buyers fighting over a home."
A total of 162 single-family homes changed owners last month, down 17.8 percent from a year ago and off 5.8 percent from this October. At least 115 homes must close escrow during December for the 2009 tally to break even with 2008.
Likewise, condominium sales of 72 units were 1.4 percent below a year ago, but up 16.1 percent from October. At least 90 condos must close escrow to match 2008, otherwise, condo sales will post their fourth consecutive annual decline.
"While a home sale in California may not hinge on an $8,000 or $6,500 tax credit, the federal program which was extended until April for first-time buyers and expanded to include repeat buyers certainly will encourage more people to jump into the market," said Jim Link, the Association's chief executive officer. "That will fuel even greater competition for entry-level homes, even if banks release additional distressed properties onto the market this Spring as expected.
"The slide in prices appears to be over," Link said, "although prices will remain soft until all distressed properties are worked out of the system and traditional sellers return in force."
The single-family median price of $407,000 for November was down 3.1 percent from a year ago, but up 1.8 percent over October. The median has been above the $400,000 benchmark every month this year, with the exception of January, after hitting the low for this cycle of $385,000 in December 2008.
The annual median is likely to post its third consecutive drop – including a 22.0 percent drop in 2008 – although this year it will be a single-digit decline in the range of 5 percent to 9 percent, depending on where the December median comes in. The slowdown in the rate of decline reflects the increased activity and competition in the lower price ranges.
The November condominium median price of $239,200 was up 1.8 percent from a year ago and 13.9 percent higher than October. It has been above $215,000 and as high as $250,000 every month since hitting the low point in March of $199,500. The condo annual median is likely to post its third consecutive annual decline, although it will be in the range of a 15 percent drop instead of the 24.1 percent decline of 2008.
Pending sales – a measure of future resale activity – of 346 units increased 28.1 percent from a year ago, suggesting that the feverish activity seen through much of this year will continue well into 2010.
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.