Homes priced under $350,000 flew off the market during February, pushing the median price down, yet an extremely tight inventory yielded another month of slack home sales throughout the San Fernando Valley, the Southland Regional Association of Realtors reported on Monday, March 26.
A total of 380 single-family homes closed escrow last month, down 1.3 percent from a year. While up 17.6 percent from this market’s low point, the February total was the second lowest for the month, higher than only the 358 sales of February 2008.
Similarly, condominium sales of 143 units were off 7.1 percent from a year ago. The February condo tally was up 36.2 percent from the low for this cycle, but also was the lowest since February 2008.
“All markets are unique, yet this one — driven by investors able to pay cash, distressed properties available at discounted prices, and an inventory that continues to vanish — is particularly challenging,” said Wendy Silver-Hale, president of the Southland Regional Association of Realtors. “Unlike other parts of the state and nation, the local inventory through this down cycle has never been excessive. In February it plunged even lower, a fact which impedes full recovery of the market and the economy.”
A total of 2,039 properties were listed for sale at the end of February on the MLS operated by the Association. That was down 34.6 percent from a year ago and the lowest monthly tally since the inventory peaked in October 2007 with 7,730 listings. Yet even at its highest, the local inventory was nonetheless half of the record high 14,976 listings seen in July 1992, which was one of multiple market downturns over the last several decades.
At the current pace of sales, February’s 2,039 listings represented a 3.9-month supply, compared to the 5.8-month supply of February 2011 and the desired inventory of 5- to 6-months that indicates a balanced market.
“With nearly seven out of ten sales and the biggest uptick in activity coming in homes priced under $450,000, it’s unsurprising that the median price dropped lower,” said Jim Link, the Association’s chief executive officer. “While total sales fell slightly, activity rose about 6 percent in entry level home categories.”
Link and Silver-Hale agreed that investors are voting with their cash that real estate currently is the most undervalued asset class in the nation.
“Cash purchases get attention, yet keep in mind,” Silver-Hale said, “about half of all closed escrows are equity sales, conventional transactions. That means there are well qualified buyers who see and are acting on today’s unique opportunities.”
The single-family home median price — the point at which half the homes sold for more and half sold for less — came in at $355,000, down 9.4 percent from a year ago. The median has been bouncing up and down for months with the February median up 4.7 percent from the record low for this cycle.
The condominium median price of $199,900 was unchanged from a year ago and 8.1 percent higher than the record low.
The Southland Regional Association of Realtors® is a local trade association with more than 9,000 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
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