With buyers clamoring for properties priced under $400,000 and eager to capture federal tax credits, home sales in the Santa Clarita Valley increased 13.6 percent during March compared to the prior year, the median increased and the inventory continued to tighten, the Southland Regional Association of Realtors reported on Friday, April 23.
Two hundred existing single-family homes closed escrow during March, up 13.5 percent from the 176 sales of March 2009 and 42.9 percent higher than the 140 sales of this February. It was the highest monthly total in seven months and well above the low point of this cycle of 99 sales posted in January 2008.
Realtors also closed escrow on 91 condominiums throughout the Santa Clarita Valley. That was 59.6 percent higher than a year ago and 42.9 percent ahead of the 140 sales closed this February.
"I expected sales to be higher in March," said Andrew Walter, president of the Association's Santa Clarita Valley Division. "In December we had lost momentum because most buyers thought that the tax credit was going to expire at the end of November. It took 30 days to gain that momentum back.
"The federal tax credit program truly helped local home sales and its end will definitely have an impact on sales," Walter said. "We're hopeful that the new California $10,000 tax credit will offset the loss of the federal program, but those funds likely will be used up just as quickly as they were with the 2009 state tax credit."
Walter and Jim Link, the Association's chief executive officer, agreed that virtually every active listing is being flooded with multiple offers, so long as it is priced correctly.
"The lack of inventory is impeding sales and fueling competition on most listings, pushing prices higher," Link said. "There would have been even more sales if the inventory was larger and if lenders could speed up the review process, especially when it comes to short sales."
Short sales, where a lender agrees to accept less then the outstanding loan to avoid the typically higher cost of foreclosure, continue to play a dominant role in the market. Some lenders are striving to make a decision faster while others take six months or longer to let buyers know if their offer has been accepted.
"Many of the large lenders are only now developing and implementing programs so they can give an answer within 30 days and close escrow within a reasonable time," Link said. "When that happens, we should see the market improve further."
The median price of the 200 homes that closed escrow was unchanged from the $400,000 median of in March 2009, but increased 2.4 percent over the median reported this February.
With activity concentrated in the lower price ranges combined with sporadic sales of higher-priced homes, the median has been bouncing between $400,000 and $420,000 since December of 2008. That was when the median came in at $385,000, the lowest median for this economic cycle.
The median price of condominiums sold last month was $240,000, up 20.3 percent from a year ago and down 4.0 percent from this February.
"Despite the competition, it's a great market for first-time buyers," Walter said. "Loans are available, although lenders are still cautious and making most buyers jump through numerous hoops to prove their credit worthiness."
The inventory of homes listed for sale continues to drop with only 887 active listings throughout the Santa Clarita Valley at the end of March. That was 25.8 percent below the inventory reported a year ago. At the current pace of sales, the inventory represents a 3.0-month supply, compared to the 5.1-month supply of March 2009. A 5- to 6-month supply is a balanced market.
Pending escrows, a measure of future resale activity, suggest that the market will grow more active in the coming months. There were 471 open escrows at the end of March. That was up 14.3 percent from a year ago.
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.