Despite record-high affordability for first-time homebuyers, sales of existing single-family homes and condominiums in the Santa Clarita Valley fell during January due to seasonal factors and ongoing consumer concerns regarding the economy, the Southland Regional Association of Realtors reported on Monday, Feb. 21.
A total of 117 homes changed owners last month, down 14.6 percent from a year ago. It was the lowest total for a January since 2008 when a record low 99 escrows closed.
Condominium sales dropped 12.7 percent from a year ago, also the lowest tally since January 2008. Condo sales had been trending higher, but started to slacken after federal tax credits ended.
“Perception is critical,” said Sal Aranda, president of the Association’s Santa Clarita Valley Division. “Prospective buyers understand all the reasons why buying now makes sense — low interest rates, low prices, limited competition, a growing inventory — but if buyers think the economy is shaky, they sit on the fence, preferring to wait, even if it means missing an opportunity.”
Realtors expect short sales to be a major factor in the market for at least another year or two, making “it easy to see that properties are undervalued” and more affordable than at anytime in decades, Aranda said. Indeed, the California Association of Realtors recently reported that the percentage of first-time buyers who could afford to purchase an entry-level home in California rose to 69 percent in the fourth quarter of 2010, matching the record high set in the first quarter of 2009.
“Seeing sales dip in January is not unusual due to typical seasonal factors,” said Jim Link, the Association’s chief executive officer. “Activity should pick up in the coming months, but another reason why January sales fell may be because short sales simply take longer to complete than traditional transactions.”
The median price of the 117 homes sold in January was $345,000, down 13.5 percent from a year ago — a new record low for this cycle, dipping 10.1 percent below the prior low of $385,000 set in December 2008.
The condo median price of $254,000 was up 8.1 percent from a year ago. The median is 23.9 percent higher than the record low of $205,000, which came in January 2009.
“It will take time to find some measure of normalcy, yet I’m confident Santa Clarita — named one of the best places to live in California and blessed with incredible schools — will do just fine,” Aranda said. “Banks are starting to lend again and soon enough buyers will see that affordability will never be better and that they can get into a home for as little as 3.5 percent down.”
There were a total of 1,162 active listings throughout the Santa Clarita Valley at the end of January. That was 46.2 percent higher than a year ago.
At the current pace of sales, that represents a 7.0-month supply — above the 5- to 6-month supply that represents a balanced market. Only recently has the inventory started to move higher.
Pending sales — a measure of future resale activity — were off 6.6 percent from a year ago with 309 open escrows at the end of January compared to 331 a year ago.
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.