After two consecutive years of annual increases in home resale activity, the recovery of the local housing market slowed slightly during 2010 as the number of single-family homes and condominiums sold decreased 9.7 percent, the Southland Regional Association of Realtors reported on Jan. 25.
Realtors closed escrow on 9,287 homes and condominiums during 2010, generating nearly $4 billion in home sales for homebuyers and sellers and the economy of the San Fernando Valley. That’s down from 10,287 properties sold in 2009.
Single-family sales totaling 6,815 were off 12.5 percent while condominium sales of 2,472 units faired better, dropping less than 1 percent.
“While 2011 will not be fantastic — a word we won’t use again for two or three more years — the market shows signs of improving,” said Fred Sabine, the 2011 president of the Southland Regional Association of Realtors. “The housing recovery was doing just fine through 2009 and the first half of 2010, before the home buying tax credits expired. But activity tapered off due to ongoing consumer uncertainty, continuing difficulties landing home loans, and the ‘robo-signing’ problems at banks, which froze foreclosures and left lots of short sales in limbo.”
Sabine said he believes lenders are slowly adapting to the new market realities. He expects loans, even jumbo loans on high-priced homes which have been generally unavailable, to be more accessible this year.
“It’s all about jobs. As people get back to work, the housing market will do just fine,” Sabine said.
Sabine and Jim Link, the Association’s chief executive officer, agreed that there is plenty of pent-up demand for housing and that today’s low interest rate on home loans encourage buyers to jump into the market.
“Those who keep waiting will miss a rare opportunity,” Link said. “There won’t be a lot of appreciation in 2011, yet housing prices already are up 21 percent from the record low. Typically, buyers wait until they see interest rates start ticking higher, but by then the best opportunities are gone.”
The 2010 annual median price of single-family homes sold in the San Fernando Valley was $390,000, up 4.7 percent from 2009. It was the first annual increase after two consecutive years of declines, including drops of 28.6 percent and 14.6 percent in 2008 and 2009, respectively.
The $412,000 median price posted in December was the highest monthly median since December 2008. It was up 7.0 percent over a year ago and was 21.2 percent higher than the record-low median of $339,900 set in February 2009.
The condo annual median price also posted an increase in 2010. The $224,250 annual median was up 2.6 percent over 2009. It was the first annual gain after three consecutive years of price declines.
The December condo median of $222,000 was down 7.5 percent from a year ago, but nonetheless up 16.8 percent from the record low for this cycle of $190,000, which came in January 2009.
The total active inventory increased during December by 27.8 percent to 3,409 listings. At the current pace of sales, that represents a 4.3-month supply — just under the desired 5- to 6-month supply representing a balanced market.
Reflecting typical seasonal patterns combined with ongoing consumer uncertainty, pending escrows —a measure of future resale activity — suggest the market will be slow through the early part of this year. There were 865 open escrows at the end of the year, down 8.0 percent from a year ago December.
Also following traditional patterns, December home sales were up 24.7 percent from November, but came in 8.0 percent below the December 2009 tally. December home sales were 81.4 percent above the record low for this cycle, which came in January 2008.
December saw condo sales of 211 units down 10.6 percent from December 2009, but up 18.5 from November, which is a typical yearend pattern. December condo sales were up 101.0 percent from the record low of 105 sales 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.