Consumer uncertainty combined with limited access to credit and seasonal factors combined to yield a slowdown in home sales during October throughout the San Fernando Valley, the Southland Regional Association of Realtors reported on Monday, Nov. 22.
The 532 single-family homes that closed escrow last month compared to 663 in October 2009, a drop of 19.8 percent. Even with the drop, the total was still up 64.7 percent from the low water mark set in January 2008. The 168 condominiums that changed owners were 26.3 percent below a year ago and 60.0 percent higher than the record low.
"Loans are dirt cheap, yet credit is still tight," said Patti Petralia, president of the Southland Regional Association of Realtors. "Large banks are slowly opening the credit pipeline, but many lenders, especially smaller community banks, impose layers of credit requirements that too often are impossible to meet."
From the free flowing, anything goes era of the boom market, lenders have gone 180 degrees in the opposite direction, despite government efforts to prod them to resume lending.
The slowdown in sales has allowed the inventory to grow slightly and puts downward pressure on prices. The median price of the 532 homes sold during October came in at $385,000, off 1.3 percent from a year ago. It was only the second month this year that the median came in lower than the prior year. Prices have been gradually rising from the low of $339,900 set in February 2009 and remain 13.3 percent above that mark. The condominium median of $220,000 was off 6.4 percent from a year ago. The condo median was up 15.8 percent from the record low for this cycle.
A total of 3,729 properties were listed for sale throughout the San Fernando Valley at the end of October. That was up 30.5 percent from a year ago and represents a 5.3-month supply at the current pace of sales — right in the range regarded as a balanced market.
"Even with highly favorable interest rates and a larger selection, resale activity has ground to a halt as prospective buyers wait to see what will happen with the economy," said Jim Link, the Association's chief executive officer. "If you can get a loan, it truly is a great time to buy, yet most of the loans being issued today refinance existing loans with only one out of five loans going to home buyers.
"Recovery was underway just a few months ago," Link said. "Now we're back in the doldrums."
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.