Home sales throughout the Santa Clarita Valley dipped during May as Realtors noted that the market is underperforming considering the highly favorable conditions and pent-up demand, the Southland Regional Association of Realtors reported on Wednesday, June 15.
Consumer hesitancy and overly tight credit were among the reasons cited for the 173 home sales during May coming in 19.5 percent below a year ago. Condominium sales of 79 units were off 13.2 percent.
While down at a time of year that typically sees heavy activity, local homes sales during May were up 74.7 percent and condo sales came in 154.8 percent better than the respective record lows, both of which came in January 2008.
“Since hitting bottom in 2008, sales have been and will continue to trend upward,” said Sal Aranda, president of the Association’s Santa Clarita Valley Division. “Given the best affordability in many years, low interest rates, strong local job creation, and demand for housing that was constrained by the recession, sales should be even stronger.”
Aranda expects sales to trend up unevenly through next year with recovery coming even faster if lenders loosen unnecessarily tight credit and decide faster on short sales and the fate of bank-owned property.
“To the large number of buyers who remain uncertain that the economy truly is in recovery, mix in slow action by lenders with lots of misunderstanding about the local market — which is far stronger than elsewhere — add a dash of unrealistic expectations on the part of buyers and sellers, and you create a market lull,” said Jim Link, the Association’s chief executive officer.
“Buyers tend to focus too laser like on short sales,” Link said, “falsely thinking the lowest price always is the best option, while sellers refuse to accept that their house might not be worth what they think it is.”
Aranda agreed that buyers who focus only on bank-owned properties or short sales can be shortsighted. “A short sale is often a better purchase,” he said, “yet there are only so many available, competition is stiff, and it can take months to get an answer from lenders.”
Purchasing a home from a traditional seller may come with a higher price tag, yet the ease of the transaction and the move-in quality of the house may well offset any perceived advantage of a lower price.
Like sales, prices have been trending higher for the last several years with the $379,900 median price of this May down 7.3 percent from a year ago, yet up 9.8 percent from the record low. The condo median price of $225,000 was down 6.3 percent from May 2010, but was up 12.5 percent from its record low for this cycle.
There were 1,200 properties listed for sale at the end of May throughout the Santa Clarita Valley, up 22.8 percent from May 2010. At the current pace of sales, that represents a 4.8-month supply, just below the desired 5- to 6-month supply that suggests a balanced market.
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.