Condominium sales surged during October, yet despite the most favorable home buying conditions in decades, sales of existing single-family homes throughout the San Fernando Valley came in below year-ago levels, the Southland Regional Association of Realtors reported Wednesday, Nov. 23.
A total of 523 single-family homes closed escrow last month, down 1.5 percent from a year ago. It was the lowest October tally since 2007 and nearly equal to the 524 monthly sales average seen in this year where only one month came in above the 600 benchmark. Nonetheless, sales were up 61.9 percent from the record low for this cycle, set in January 2008.
Meanwhile, buyers grabbed remarkable opportunities in the condominium segment of the market with 217 condos closing escrow. Condo sales increased 29.2 percent from a year ago and rose 10.2 percent higher than this September. Condo sales are up 106.7 from the record low, also set in January 2008.
“Buyers or interested and getting more active as they realize the magnitude of today’s opportunities to own a home or condominium,” said Fred Sabine, president of the Southland Regional Association of Realtors.
“Interest rates are at the lowest level in decades, resale prices are stunningly low, and there’s a general recognition that despite ongoing economic uncertainty real estate today offers better opportunities than any other asset class,” Sabine said.
Jim Link, the Association’s chief executive officer, agreed: “Consumer confidence hinges on what is happening in the overall economy and what politicians are doing to resolve difficult issues.
“Until government does something definitively to help housing,” Link said, “the market will improve only slowly, and people will sit on the sidelines, which is too bad because some will miss the best opportunity to buy home in a generation.”
The median price of homes sold last month was $350,000, down 9.1 percent from a year ago. While up 3.0 percent from the record low for this cycle set in January 2009, it matches the January median as the lowest price this year and is in a price range not seen since 2003.
Pushed by eager first-time buyers and investors, the condominium median price of $225,000 was up 2.3 percent from a year ago and 21.6 percent better than the record low for this cycle.
Link and Sabine noted that returning the cap on the conforming loan limit to $729,750, which passed Congress and is likely to be signed by President Obama, is welcome news for the local market, even though current activity is focused on lower-priced homes. The increase applies to FHA-insured loans only — Fannie and Freddie were excluded — and will remain in place until Dec. 31, 2013.
There were 2,942 active listings throughout the San Fernando Valley at the end of October, down 21.1 percent from a year ago. At the current pace of sales, the inventory represents a 4.0-month supply, down from the 5.3-month inventory of October 2010 and just under the 5- to 6-month supply that represents a balanced a 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.