As the inventory of homes listed for sale fell plummeted, sales of single-family homes and condominiums in the San Fernando Valley slowed during June despite strong buyer demand that generated multiple offers on many properties, the Southland Regional Association of Realtors reported on Wednesday, July 25.
The 1,506 active listings at the end of the month were down 55.7 percent from a year ago. It was the next lowest monthly total since the record low 1,492 listings reported in March 2004 as the market was soaring to unprecedented heights. At the current pace of sales the active listings represented a 2.1-month supply, compared to the 4.4-month inventory of June 2011 and the 1.0-month supply reported in March 2004. For comparison, active listing peaked during this cycle in October 2007 at 7,730 and hit a record high of 14,976 in July 1992 during the recession of the early 1990s.
“The silver lining to a low inventory today is that there are fewer foreclosures, which means the market and the economy are healing,” said Wendy Silver-Hale, president of the Southland Regional Association of Realtors. “Yet, a normal market will elude us because nearly one-third of current owners owe more than the current resale value of their home.”
Silver-Hale and Jim Link, the Association’s chief executive officer, agreed that in a normal market many of today’s “underwater owners” would be listing and selling.
“Each uptick in prices reduces the number of underwater owners, giving them more options,” Link said. “Upside-down owners who are not forced to sell via a short sale have little choice but to wait. That’s one big reason why inventory is so tight.”
Link and Silver-Hale also agreed that owners with equity and the desire to trade up or trade down are in an excellent position to take advantage of historically low interest rates on home loans.
“The tight inventory guarantees quick, heavy activity on correctly priced active listings, with the sale price often bid higher than the list price,” Silver-Hale said. “Buying now gets more house for less money, thus multiplying the impact of every housing dollar.”
Many of the 524 single-family homes that sold last month attracted multiple offers, she said. That total was down 6.6 percent from a year ago. It was the first drop in sales after four consecutive gains in month-to-month totals. Despite being the lowest total on record for the month of June, it was nonetheless up 62.2 percent from the all-time record low set in January 2008.
Condominium sales of 177 units fell on a year-to-year basis, dropping 12.8 percent. The condo drop also followed four consecutive month-to-month gains and was the lowest total for June since 1994, yet up 68.6 percent from the record low for this cycle.
The presence of multiple offers on many properties helped push the median price of homes sold during June to $399,900, up 8.4 percent from a year ago and 6.6 percent better than this May. Several times over the last 18 months the single-family median has flirted with the benchmark $400,000 price, but this was the closest it has come since December 2010. The median price has not been consistently above $400,000 since 2008.
The condominium median price of $244,900 was 9.1 percent higher than a year ago and 11.3 percent better than this May, and the highest since April 2010. The June condo median price was up 32.4 percent from the record low for this cycle.
Of the transactions that provided information, 37.1 percent were standard sales, while 14.6 percent were short sales, and 11.5 percent were REOs, the Association reported.
“The number of standard sales is steadily increasing compared to short sales or REOs,” Link said, “and prices are inching higher. The market clearly is better than a year ago, yet there’s plenty of ground yet to be made up.”
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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