Sales of existing single-family homes in the Santa Clarita Valley increased for the second consecutive year during 2009 with the 2,258 closed escrows up 2.9 percent from the tally reported in 2008, the Southland Regional Association of Realtors reported on Thursday, Jan. 28.
The increase in activity was not as pronounced as the 10.1 percent rise reported in 2008 primarily because tight financing and an extremely limited inventory of properties listed for sale restricted sales even as buyers returned to the market to capture favorable prices, low interest rates and a federal tax rebate.
Annual condominium sales also increased during 2009, posting a 0.5 percent gain over 2008. It was the first increase in condo annual sales after three consecutive years of declines. A total of 840 condos changed owners last year.
The 3,098 properties negotiated by Realtors during 2009 generated $1.16 billion for home buyers, sellers and the local economy. Typically, each sale yields many thousands of dollars more as buyers paint, landscape, remodel and purchase appliances to prepare a home for occupancy.
"Overall, what we're seeing is very encouraging," said Andrew Walter, the 2010 president of the Association's Santa Clarita Valley Division. "The bottom has passed and in 2010 we're likely to see more sales and a slow, steady increase in resale prices."
The annual median price of single-family homes sold last year declined for the third consecutive year, although not as steeply as in 2008. The 2009 annual median of $407,208 was down 8.5 percent from the prior year, compared with a 22.0 percent drop posted in 2008.
However, Walter noted that the low point for resale prices of this real estate cycle came in December 2008 when the monthly median hit $385,000.
Ever since, prices have been trending higher as multiple bidders compete over a limited number of homes for sale. The year ended with a December median price of $417,500, the highest monthly median of the year.
"It's very important for consumers to understand that while prices are still the most favorable in many years, the demand for entry-level homes is so strong that we're seeing multiple offers on the limited number of properties listed under $500,000," Walter said.
"We're blessed that Santa Clarita is such a desirable place to live," Walter said, "yet that translates into added competition on every listing and the need to present offers over list price if a buyer wants a real chance of success."
With most buyers hoping to take advantage of a unique opportunity to buy a single-family home, condominium resale prices have been slow to recover, although there, too, the low point appears to have passed with the lowest monthly median of this cycle appearing in March.
The condo annual median price of $226,567 was 15.5 percent lower last year, which was an improvement from the 24.1 percent drop in the annual price seen in 2008. It was the third consecutive the condo annual median fell.
"Prices are still down from the prior year, which is what attracts buyers," said Jim Link, the Association's chief executive officer, "but the upward trend in prices has narrowed the gap.
"The market certainly is not healthy or even balanced, with the scale still favoring buyers," Link said, "but it certainly has improved and is much better off than this time last year."
December ended on a relatively positive note, even with a limited inventory. December single-family sales of 178 homes were off 7.3 percent from the prior year, but up 9.9 percent from November as buyers sought to lock in the federal tax credit, which had been set to expire at the end of November but has since been extended through April 30. December condo sales of 94 units were up 5.6 percent from the prior year and rose 30.6 percent from the November tally.
There were 738 properties listed for sale at the end of December throughout the Santa Clarita Valley. That was down 44.7 percent from the prior year. At the current pace of sales, the inventory represents a mere 2.7-month supply, down from the 4.7-month supply of December 2008. A supply of 5- to 6-months is believed to represent a "balanced" market.
Pending escrows, a measure of future resale activity, increased 16.7 percent during December, which suggests the market will remain busy well into the Spring.
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.