The median price of homes sold during February in the San Fernando Valley increased nearly 5 percent while weaker than expected home sales reflected the dual impact of last year’s end of homebuyer tax credits and the freeze that stopped foreclosures while lenders sorted out a raft of issue, the Southland Regional Association of Realtors reported on Wednesday, March 23.
The median price came in at $392,000, up 4.5 percent from a year ago and 12.0 percent ahead of the median reported in January. For two years the median has been trending higher, hitting as high as $412,000 in December. It now is 15.3 percent higher than the record low for this cycle of $339,900 set in February 2009.
With demand for affordable single-family homes heavier than for condominiums, the condo median price of $199,900 was off 11.9 percent from a year ago.
“Spring is here and with it comes the end of housing’s long economic winter,” said Fred Sabine, president of the Southland Regional Association of Realtors. “The numbers need to be more positive, yet there are signs popping up all over that the market is picking up momentum. Realtors say they are calmer and that they are more positive the worst is behind us.”
No only are more “For Sale” signs being ordered, Sabine said he’s noticing the reappearance of multiple offers on properly-priced properties, even in higher price ranges, which suggests that jumbo loans are more available after months of being virtually impossible to find.
Sabine and Jim Link, the Association’s chief executive officer, said there are three types of properties for sale on today’s local market: standard sales by owners; REO’s or bank-owned properties (foreclosures); and short sales, where a home is sold for less than the outstanding loan balance.
Fifty-five percent of sales during February throughout Los Angeles County were distressed sales, made up of both REO’s and short sales, according to the California Association of Realtors. Of that percentage, about a third were foreclosures and approximately 23 percent were short sales, C.A.R. reported.
“The percentage of foreclosures is down (3%) from last year, while short sales increased 4 percent,” Link said. “That’s an important switch, an improvement that is very noteworthy because it suggests lenders are starting to work with owners, rather than let some people who owe more than a property is worth go into foreclosure.
“A short sale helps out the owners, brings an attractively priced property to the market, and saves the lenders the time, expense and headache of a foreclosure,” Link said. “Additionally, short sales speed the economic recovery.”
Link and Sabine were disappointed at February sales of 385 single-family homes and 154 condominiums, off 15.9 percent and 18.9 percent from a year ago, respectively. Yet they noted a February drop is somewhat expected as it reflects activity in November, December and January, typically slow months of the year.
Plus, the end to federal and state homebuyer tax credits last year combined with a brief freeze on foreclosures while investigators researched so-called “robo-signing” irregularities at banks yielded further slowdowns in resale activity.
“The tax credits may well have merely moved up transactions that would have occurred anyway,” Sabine said. “And the freeze on foreclosures kept properties off the market and left consumers a little dazed and uncertain. With both behind us, it’s beginning to feel like more normal, sensible market, with incremental improvements in resale activity and modest price gains.”
The Association reported a total of 3,117 homes and condos listed for sale throughout the Valley at the end of February. That was up 4.9 percent from a year ago. At the current pace of sales, that represents a 5.8-month supply, which is right in the range of what’s supposed to be a balanced market and an improvement from a year ago when the inventory was at a 4.6-month supply.
For comparison, at the peak of the recession of the early 1990s, the local inventory hit a high of 14,976 properties and a record-high 23.0-month supply.
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.
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