Low resale prices and attractive interest rates on home loans pushed condominium sales up during October in the Santa Clarita Valley while consumer uncertainty and tight credit, especially on jumbo loans, depressed home sales, the Southland Regional Association of Realtors reported on Monday, Nov. 22.
Defying seasonal trends and uncertain market conditions, the 74 condominiums sold last month increased 1.4 percent compared to a year ago and rose 4.2 percent from this September. Condo sales are up 138.7 percent from the low point for this cycle, which came in January of 2008 when a mere 31 condos sold.
Existing single-family homes sold during October throughout the Santa Clarita Valley declined 26.9 percent compared to a year ago. A total of 144 homes changed owners, 53 transactions lower than the 197 sales of October 2009. Part of the decline is seasonal, although home sales are still up 45.5 percent from the record low for this cycle.
"Renting costs more today partly because former home owners who were displaced due to foreclosure have put pressure on rentals, pushing rental prices up," said Andrew Walter, president of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. "Renters have figured out that with today's low condo resale prices and low interest rates on loans it's cheaper to buy a condo rather than rent an apartment."
The condo median price of $239,000 was up 1.7 percent from a year ago and 9.1 percent ahead of the September median. The condo median is down 39.8 percent from its record high, but up 16.6 percent from the low point of $205,000 set in January 2009.
The median price of single-family homes sold last month was $390,000, down 7.1 percent from a year ago when the median was $420,000. The median has been floating between $390,000 and $420,000 throughout the year, with the October median up 1.3 percent from the record low for this cycle.
"Especially in the higher price ranges, there's a wait-and-see attitude about the direction of the economy," said Jim Link, the Association's chief executive officer. "The uncertainty and difficulty landing jumbo loans has stalled sales in higher price ranges, yet for anyone who can get a loan, it truly is a great time to buy."
The active inventory of 1,294 units reported at the end of October was up 77.5 percent from a year ago when there were only 729 active listings. At the current pace of sales, that represents a 5.9-month supply, right in the middle of the 5- to 6-month supply that represents a balanced market.
Pending escrows — a measure of future resale activity — suggests that the market will continue to slow as the holidays approach. There were 328 open escrows at the end of October, down 15.0 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.