Despite a vanishing inventory, home and condominium sales during July throughout the Santa Clarita Valley increased compared to a year ago, with home sales up 8.6 percent and condos transactions rising 20.5 percent, the Southland Regional Association of Realtors reported on Friday, Aug. 24.
A total of 203 homes changed owners, up 16 transactions from the 187 sales of July 2011. Realtors also closed escrow on 88 condo sales, 15 higher than a year ago. The numbers continue a long-term trend that has the local housing market on a slow, steady recovery.
“It’s amazing that the month ended with sales higher than a year ago because, frankly, there are very few properties out there for people to buy,” said Erika Kauzlarich-Bird, president of the Association’s Santa Clarita Valley Division. “The inventory is tumbling. There are plenty of buyers, yet not much for them to mull over.”
Indeed, the Association reported a total of 490 active listings throughout the Santa Clarita Valley. That was down 57.3 percent from the 1,148 listings of July 2011. At the current pace of sales, the 490 listings represents a 1.7-month supply — well below the 4.4-month supply of July 2011 and a clear indicator of a sellers’ market. A balanced market emerges when there is a 5- to 6-month supply.
Kauzlarich-Bird note that properly priced homes are attracting multiple offers and typically sell quickly, often at prices higher than the original list price. But because of the limited inventory with a heavy reliance on distressed properties, most of the sales are coming in entry-level price ranges, which tends to statistically drag the median price down.
The median price of the 203 homes sold last month of $350,000 was 5.4 percent below a year ago. Likewise, the condominium median price of $170,000 was down 21.8 percent from July 2011.
Jim Link, the Association’s chief executive officer, the ongoing presence of short sales, where lenders agree to accept a price lower than what is owed, and REOs, real estate owned property typically acquired by banks via foreclosure, also tends to push the median price down while discouraging traditional sellers from entering the market.
“The good news is that sales are on the rise,” Link said. “The bad news is there’s not much to sell.
Of the 291 total transactions last month, 32.3 percent were short sales, 27.8 percent were standard sales, and 15.5 percent were REOs. In other regions, the percentage of standard sales already outstrips the combined total of distressed properties.
“Short sales pose the biggest problem,” Kauzlarich-Bird said, noting that confusion over the true market value of a property offered via short sale sometimes yields an initial list price that is too low. That may generate multiple offers and a quick transaction, but incorrect broker price opinions can keep prices below true market value, which, in turn, discourages standard owners who otherwise might decide to list their property for sale.
“The fact is that owners with even the smallest bit of equity are in a position to sell, move to a bigger or better home, while paying the same mortgage or less,” Kauzlarich-Bird said. “Instead of waiting for prices to rise, re-evaluate your position to capture today’s low rates and low prices, neither of which are likely to be around this time next year. This just might be a good time to take advantage of market realities.”
Despite the dwindling inventory, pending escrows — a measure of future sales activity — came in higher than a year ago. There were 373 open escrows at the end of July, up 9.1 percent from the 342 pendings of July 2011.
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.