Ongoing difficulty landing home loans and consumer uncertainty about the economy combined with the end midyear of the federal housing tax credits led to slower home sales during the second half of 2010 and the first drop in the annual total since the local housing recovery began in 2008, the Southland Regional Association of Realtors reported on Tuesday, Jan. 25.
Realtors throughout the Santa Clarita Valley closed escrow during 2010 on 2,947 properties — generating more than $1.1 billion in single-family home and condominium sales for the local economy. That’s down 6.8 percent from the 3,080 sales in 2009, which were valued at $1.16 billion.
“I fully expect the housing recovery to gain momentum this year, perhaps more so in the Santa Clarita Valley than other regions throughout Southern California,” said Sal Aranda, the 2011 president of the Association’s Santa Clarita Valley Division. “It’s getting easier to obtain home loans from the two main lenders in the region. Plus, we have industries investing locally, including the construction of a new studio facility that means new construction jobs and new permanent jobs, which will increase demand for housing.”
Additionally, Aranda said, it’s encouraging to note that new home construction is underway again in the Valley with some properties priced in the prime $400,000 and $500,000 range already available.
“Condos are doing very well with some priced as low as $60,000 and $70,000, which is amazing given the desirability of the local community,” Aranda said. “Santa Clarita is a newer city, a safe city, a city that is investing in green technology, with great schools and great opportunities.”
A total of 2,076 single-family homes closed escrow in the Santa Clarita Valley last year, down 8.1 percent from 2009. It was the first year the annual tally declined after two consecutive years of increases. After the national economy plunged into recession, the local market hit bottom in 2007 with 1,993 annual home sales.
Reflecting the pent-up demand for affordable housing, annual condominium sales faired better — increasing for the second consecutive year during 2010. Realtors closed escrow on 870 condos throughout the Santa Clarita Valley, up 3.6 percent from 2009. The end of the recession for condos came in 2008 with 836 sales. Since then, the condo tally has been steadily climbing.
“The national financial crisis generated thousands of foreclosures and short sales, with distressed properties accounting for two-thirds of local home sales through 2008 and 2009,” said Jim Link, the Association’s chief executive officer. “Bank-owned properties and short sales started to diminish last year, so that now they account for about one-third of sales.
“The housing tax credits definitely got buyers off the fence and helped tremendously,” Link said. “Yet when the credits ended midyear, activity slowed down as people had to adjust to a new reality.
“Even though we have at least three more years before short sales move through the system,” Link said, “the region is highly desirable, offering affordable options for first-time buyers, especially with today’s low interest rates.”
The single-family annual median price of $406,408 came in only slightly lower than the 2009 annual median — down 0.2 percent. It was the smallest decline in the annual median price since it started sliding in 2007. Since hitting the record low of $385,000 in December 2008, resale prices have been fluctuating wildly — going as high as $420,000 in July — but now appear to be stabilizing.
The annual condominium median price posted the first increase during 2010 after three consecutive years of decline. The condo annual median of $227,667 was up 0.5 percent from a year ago. The December condo median of $213,000 was down 5.3 percent from the prior year, but up 3.9 percent from the record low of $205,000 set in January 2009.
There were 1,243 properties listed for sale throughout the Santa Clarita Valley at the end of December. That was 68.4 percent higher from a year ago when the inventory stood at 738 listings. Based on the current pace of sales, the 1,243 listings represents a 5.8-month supply, right in the 5- to 6-month range believed to represent a balanced market. A year ago the inventory was a mere 2.7-month supply.
Pending escrows — a measure of future resale activity — indicate the market will continue to slow through the coming months, a typical pattern for this time of year.
December ended with single-family sales up 10.1 percent from November, a typically pattern as buyers sought to close escrow before the end of the year. The 163 closed escrows were down 8.4 percent from December 2009, yet even with the decline, the total was up 64.5 percent from the record low set in 2008.
The 50 condos sold during December were 46.8 percent below a year ago, but up 61.3 percent from the record low set in January 2008.
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.