A total of 501 single-family homes closed escrow during May throughout the San Fernando Valley while condominium sales came in at 149 units, the Southland Regional Association of Realtors reported on Wednesday, June 15.
The single-family total was down 26.1 percent from a year ago and off 6.6 percent from this April. While the lowest on record for the month, the May tally was nonetheless up 55.1 percent from the record low for this cycle of 323 sales posted in January 2008.
Similarly, the condo total was down 30.0 percent from a year ago and off 27.7 percent from this April, yet still better by 41.9 percent than this cycle’s record low 105 sales.
“I can’t blame home buyers for being uncertain, especially when they look at national numbers, but the local housing market is in much better condition,” said Fred Sabine, president of the Southland Regional Association of Realtors. “
“The housing market overall is in a slow recovery,” Sabine said, noting that activity picks up and then falls back again. “Currently, we’re in a bit of a stall period.”
Sabine said interest rates are fantastic while prices are extremely appealing.
“For owners with equity, it’s an especially great time to sell and move up or down to a home better suited to your lifestyle,” he said. “We’d have more sales if sellers were more realistic with their prices and if buyers realized it makes little sense to wait around in the hope that there might be further price drop, which might be offset by higher interest rates.”
The median price of the 501 homes that closed escrow last month hit $399,000, up 3.6 percent from a year ago and 12.4 percent higher than this April. Prices have gained 17.4 percent from the low point, which came in February 2009.
The condominium median price of $226,000 was down 3.0 percent from May 2010, but up 13.0 percent from April. It has increased 22.2 percent from its record low of $185,000, which came in May 2009.
“I’m not worried about a slow recovery, but what does concern me is today’s paralysis by analysis,” said Jim Link, the Association’s chief executive office. “The Internet makes everybody a statistician and economist, yet over thinking the market combined with inadequate or inaccurate information about the local reality leads to a stalemate.
“Buyers think a home should sell for thousands less,” Link said, “while sellers cling to out-dated notions that their home certainly must be worth thousands more.”
A mere 2,846 homes and condominiums were listed for sale throughout the Valley at the end of May, down 15.7 percent from a year ago. At the current pace of sales the inventory represents only a 4.4-month supply, better than the 3.8-month supply of May 2010.
The inventory has been steadily declining since peaking with 7,505 listings — a 15.1-Month supply — in November 2007. For comparison, the recession of the early 1990s saw the inventory swell to a record high of 14,976 listings with sales taking on average longer than 15 months and even a record 23 months.
Pending escrows, a measure of future resale activity, suggest the market will remain in the doldrums. There were 840 open escrows at the end of May, down 22.9 percent from a year ago when federal and state tax credits spurred sales.
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.