An unusually limited inventory restricted single-family home sales during April throughout the San Fernando Valley, the Southland Regional Association of Realtors reported on Friday, May 21.
The 644 homes that closed escrow were 6.8 percent lower compared to a year ago also because of the end of the federal tax credit for first-time and repeat homebuyers. However, due largely seasonal patterns, April sales were up 8.4 percent over the total reported this March.
"There are some great opportunities to buy for people who have the ability to qualify for a loan," said Patti Petralia, president of the Southland Regional Association of Realtors.
"More people can qualify in the lower price ranges than just a short time ago," she said. "Interest rates are still very low, and while there is intense competition for properly-priced properties, traditional buyers can still land a bargain."
Petralia expected California's $10,000 tax credit to offset the loss of the federal credits, which should keep the market's recovery going.
Petralia and Jim Link, the Association's chief executive officer, agreed that while there are fewer short sales and foreclosures on the market compared to a year ago, distressed properties nonetheless represent 50-60 percent of all listings.
"Distressed properties and economic uncertainty are still the dark clouds on the horizon," Link said. "A truly healthy market will not fully emerge until people get back to work and distressed properties work their way through the system."
Noting an increase in condominium sales, Link agreed with Petralia that despite the limited inventory of condos there are still opportunities for buyers.
Until recently, buyers were focused on purchasing a single-family home, which are more affordable than at any time in many years. Yet as single-family options dwindle, buyers are turning to condos. A total of 217 condos changed owners during April, up 3.3 percent from a year ago and 2.8 percent higher than this March.
There were 3,137 active single-family and condominium listings throughout the San Fernando Valley at the end of April. That was down 19.0 percent from a year ago.
The current inventory represents a 3.6-month supply at the current pace of sales, which suggests that the market favors sellers. Last April the supply was enough to last 4.3 months — still below the 24-year average of a 5.6-month supply that would indicate a balanced market. For comparison, at the height of the buyers' market in the early 1990s, the monthly average listing total was 13,300 properties, which was a 23-month supply at the then current pace of sales.
With fierce competition for properties priced under $500,000 still attracting multiple offers, Link said buyers would find fewer competitors and a wider range of opportunities the higher a buyer can go in price ranges.
"Most of the activity is concentrated in the median and low price ranges," Link said, "but as lenders get more comfortable making jumbo loans buyers will discover the best resale prices in many years. Just be ready to jump many hurdles to win lender approval because it's still very difficult to land a jumbo loan."
The single-family median price of $379,000 was up 6.8 percent compared to April 2009. Prices have been volatile, but trending higher since the low point of February 2009
The condominium median price of $250,000 was 12.2 percent higher than April 2009. It was the highest condo median price reported since condo prices hit their low point of $185,000 in May 2009.
"We have a trend," Petralia said. "While still bouncing up and down from month-to-month, prices are up and there is a steady pattern. Recovery is underway."'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.