Single-family home sales in the Santa Clarita Valley during April fell 10.3 percent compared to a year ago as the effects of a limited supply of properties listed for sale and the end of federal tax credits combined to slow activity, the Southland Regional Association of Realtors reported on Friday, May 21. A total of 192 homes changed owners, 22 fewer sales than in April 2009.
"I'm very optimistic, but I know the market would look much better if more properties were available," said Andrew Walter, president of the Association's Santa Clarita Valley Division. "The key to capturing today's opportunities is to make decisions based on the best information available today.
"Owners thinking about moving up need to be creative, realizing that the tradeoffs they make on one side of a transaction most likely will be offset by gains on the other end," Walter said. "There are some great values out there. Just be sure to buy a home for the right reasons — the quality of life benefits, the advantages of owning versus renting, the tax benefits and the long-term cost effectiveness."
The real estate industry is in a virtually constant state of flux with the rules changing on almost a daily basis, he said. That won't change until distressed properties move through the system.
Still, Walter and Jim Link, the Association's chief executive officer, said there are more buyers than properties up for sale partly because many people realize that homes that not long ago were out of reach now are affordable, even as prices again begin to rise.
The median price of single-family homes sold last month came in at $420,000, up 2.4 percent from a year ago and 5.0 percent higher than this March. The single-family median is down 34.7 percent from its record high of $643,000 set in April 2006, but has been steadily climbing higher from its low point.
"The April median price was the highest it's been since the recession began and the median fell to its low of $385,000 in December 2009," Link said. "Recovery clearly is underway, even as distressed properties make up the majority of homes listed for sale."
The condominium median price of $221,000 was off 11.6 percent from a year ago when it stood at $250,000, the highest figure seen since the recession began. Attractive interest rates on home loans, federal tax credits and low condo prices have attracted more interest from buyers, especially as the supply of single-family homes dwindles.
Condo sales during April increased 25.4 percent from a year ago. Realtors closed 74 condo escrows last month, up 15 transactions from the prior year.
"April sales would have been much higher except for the lack of inventory," Walter said. "The $8,000 federal tax credit gave the market momentum, which likely will continue now that the state's $10,000 credit is in place. Hopefully, the state's funds, which were used up very quickly last year, will hold out long enough to ensure the market maintains its momentum."
Pending escrows — a measure of future resale activity — suggest the market will pick up in the months ahead. There were 489 open escrows at the end of April, up 18.7 percent from a year ago.
"But to keep the recovery going, we need more inventory," Link said, "which is likely to remain very tight at least until traditional sellers again start listing their homes for sale."
The inventory of 909 active listings at the end of April throughout the Santa Clarita Valley was down 18.8 percent from a year ago. At the current pace of sales, the inventory is a mere 3.4-month supply, well below the desired 5- to 6-month supply that would indicate a balanced market. A year ago this indicator of market health stood at a 4.1-month supply.
"Real estate, while not as volatile, is somewhat like the stock market in that it's an equity investment," Walter said. "A lot of its health is based on the public's perception, on emotional factors, which may or may not be based on facts. Even if most of the current conditions are favorable enough to make owners willing to list properties for sale, that won't happen if they remain uncomfortable, unsure of what's ahead.
"It's a fact that the market is improving," Walter said. "Yet recovery will be slow, until the public truly believes that fact."
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.