The resale market in the Santa Clarita Valley stalled during January as a popular federal tax credit for first-time buyers that appeared to be ending plus a depleted inventory of homes for sale combined to limit buyer options, the Southland Regional Association of Realtors reported Wednesday, Feb. 24.
A total of 137 single-family homes closed escrow during January, down 6.8 percent from a year ago. Realtors also closed escrow on 55 condo sales last month, down 38.2 percent from a year ago.
"A tight inventory has plagued Santa Clarita for months," said Andrew Walter, president of the Association's Santa Clarita Valley Division. "Plus, buyers who in order to afford a home needed the $8,000 federal tax credit for first-time buyers were scrambling over each other to get into escrow before the credit was set to expire in November."
That deadline eventually was extended to April 30 — and a tax credit of $6,500 offered to repeat buyers — but by the time the new deadline had been announced, some buyers had already left the market and are only recently started jumping back in, Walter said.
He expected another wave of closed escrows to begin appearing in the coming months. Pending escrows, a measure of future resale activity, support that belief. The number of open escrows was up 6.1 percent from the same period a year ago.
The inventory continued to decline during January with the 795 active listings off a whopping 41.8 percent from a year ago when there were 1,365 active listings.
At the current pace of sales, the inventory represents a 4.1-month supply — below the 5- to 6-month supply that represents a balanced market. A year ago the index showed a 5.8-month supply.
"While there are still many clouds on the horizon, Realtors believe the housing recovery will continue through this year," said Jim Link, the Association's chief executive officer.
"We're cautiously optimistic that the worst is past," he said, "and that we'll see more traditional sellers enter the market this Spring, even as distressed properties and short sales work their way through the market."
Link and Walter noted that the high percentage of short sales and delays in getting approvals from lenders remain a drag on the market.
"Even though some of the major banks are finally developing a fast-track system" Walter said, "the extended time frame to successfully negotiate a short sale is seriously affecting average escrow periods. Instead, of the normal 30- to 45-day escrows, when it comes to short sales it's taking lenders longer than 90 days to decide."
The median price of homes sold last month was $399,900, up 1.0 percent from a year ago, but off 4.2 percent from the December median. It was the first time that the median slipped below $405,000 after four consecutive months of being above that benchmark. The median has been trending higher since December of 2008 when it hit the low mark for this cycle of $385,000.
The condo median of $235,000 was up 14.6 percent from a year ago and 4.4 percent higher than December. The low point for condos came in March 2009 with a median of $199,500. It has been above $218,000 every month since, including one month when the condo median came in at $250,000.
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.