An exceptionally limited inventory restrained sales of existing single-family homes during March throughout the San Fernando Valley with multiple offers common on many of the 594 homes that closed escrow, the Southland Regional Association of Realtors said on Friday, April 23.
Compared to a year ago, single-family sales fell 7.2 percent, but were up 29.7 percent from the February 2010 tally.
Realtors also closed escrow on 211 condominium sales last month, up 1.9 percent from March 2009 and 11.1 percent ahead of this February's tally.
"Rising resale prices and multiple offers typically indicate a sellers' market," said Patti Petralia, president of the Southland Regional Association of Realtors. "While that rule doesn't totally fit this market, because the lender is the one making the decision in a foreclosure or short sale, it's still a much better time for traditional sellers to list a home for sale.
"There are plenty of qualified buyers," Petralia said, "and simply not enough properties listed for sale to satisfy pent-up demand."
Petralia and Jim Link, the Association's chief executive officer, said that with fewer bank-owned properties coming on the market and traditional sellers still hesitant to list their properties, the selection of homes listed for sale is concentrated on properties being sold through a short sale, where a lender is willing to accept less than what is owed to avoid the typically higher expense of foreclosure.
"Some lenders are being more proactive in working with short pays," Petralia said, "but it remains unpredictable. Some lenders respond quickly, others take six months or longer to say yes or no."
"Along with the lack of inventory, the biggest problem Realtors have right now is that short sales are taking too long to close escrow," Link said. "Even traditional sales are taking longer as lenders are being more than cautious.
"You can't blame lenders for being a little gun shy," Link said, "but we're confident that sales would be much higher if lenders acted faster and if there were more homes listed for sale."
While new listings showed signs of improvement — which typically happens every Spring — the total active inventory remains low, tipping the scale in favor of sellers.
There were 3,091 active listings throughout the San Fernando Valley at the end of March, down 24.5 percent from a year ago. At the current pace of sales, the inventory represents a 3.8-month supply, compared to the 4.8-month supply of March 2009. A 5- to 6-month supply presents a balanced market.
The median price of the 594 single-family homes sold last month was $400,000, up 15.6 percent from a year ago when it stood at $345,900, and 6.7 percent higher than the median reported this February. The median rose to $400,000 in two other months — July and December 2009 — and has been tracking higher since the record-low for this cycle of $339,000 in February 2009.
The condominium median price of $214,000 was up 7.0 percent from a year ago, but down 5.7 percent from February. The condo median price was as high as $240,000 in December and appears to be moving higher, yet remains volatile.
Pending escrows, a measure of future resale activity, suggest that there will be limited resale activity over the coming months. There were 1,272 open escrows at the end of March, down 1.5 percent from a year ago.
With the impending expiration of the federal tax credits, which fueled resale activity in the closing months of 2009, Realtors wonder if the California tax credits will make up the difference and how long the state's tax credits will be available. Last year's program was so popular that it ran out of money eight months before it was set to expire, Link noted.
"The new State program is available to new and existing homes and, like last year's program, will be very popular, so I think the funds will disappear quickly," Petralia said. "The tax credit is worth trying to get if you can move quickly, but first-time buyers should not hinge a decision to buy a home weighted heavily on the availability of the tax credit."
'The Southland Regional Association of Realtors® is a local trade association with more than 10,000 members serving the San Fernando and Santa Clarita valleys. SRAR is one of the largest local associations in the nation.