The nascent recovery of the home resale market in the Santa Clarita Valley that emerged in fourth quarter 2011 continued during April even as a rapidly dwindling inventory appeared to be putting a brake on sales, the Southland Regional Association of Realtors reported on Friday, May 25.
After six consecutive months of increases in sales of existing single-family homes, the 176 closed escrows reported in April came in 3.8 percent below a year ago and down 2.2 percent from March. It was the first year-to-year drop since September and only the second drop since last June. Nonetheless, the April tally was 77.8 percent above the low-point for this cycle of 99 sales, set in January 2008.
Condominium sales continued to surge with the 101 closed escrows up 53.0 percent over a year ago and 50.7 percent better than March. After a rebound in 2010, condo sales flattened during much of 2011 only to start improving in the fourth quarter. Every month this year has seen condo sales top the prior year’s total, so much so that the 101 sales in April were a whopping 225.8 percent higher than the record low 31 closed escrows, also set in January 2008.
“It’s a complex, rapidly evolving housing market that offers plenty of stumbling blocks along with plenty of opportunities,” said Erika Kauzlarich-Bird, president of SRAR’s Santa Clarita Valley Division. “Buyers get it, they understand that housing has not been this affordable in a generation, yet there are simply not enough properties listed for sale.
“Inventory, rather the lack of it,” she said, “appears to be holding back the market at a time when interest rates remain near historically low levels, prices have hit record affordability, and buyers are showing up in great numbers.”
The 668 active listings throughout the Santa Clarita Valley at the end of April were down 43.9 percent from a year ago. At the current pace of sales that represents a 2.4-month supply, well below the desired 5- to 6-month active inventory that represents a balanced market. A year ago the index was a 4.8-month supply.
“There have not been enough homes listed for sale in the entry level price ranges for quite some time now,” said Jim Link, the Association’s chief executive officer. “Now it’s gotten even tighter in lower priced homes and has extended to higher priced homes.
“People are surprised to learn that the inventory is so limited,” Link said. “There’s a false impression that we have the same large inventories of distressed properties found in other regions of the country, but the Southern California market is very different and we really need more homes and condos to satisfy a pent-up demand.”
The median price of single-family homes sold last month of $375,000 was unchanged from a year ago, but down 0.8 percent from March. The median price was up 10.3 percent from the record low for this cycle of $340,000, which was set in November.
The condominium median price of $195,000 was off 17.0 percent from a year ago, yet up 2.6 percent from March. The condo price reported this April was up 5.7 percent from the record low, set in October 2011.
While now in single-digits after months double-digit gains, pending escrows — a measure of future sales activity — continued to post positive numbers. There were 433 open escrows at the end of April, up 9.1 percent from a year ago.
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.