Even as the inventory of homes listed for sale throughout the San Fernando Valley dropped to a record low, closed escrows during July of existing single-family homes hit the second-highest tally in two years while median prices increased compared to a year ago, the Southland Regional Association of Realtors reported on Friday, Aug. 24.
A total of 589 homes closed escrow last month, up 12.8 percent over July 2011 and 12.4 percent better than this June. It was the highest sales total so far this year and the highest figure since June of 2010, with the exception of 618 sales in August 2011 and July 2010 when an identical 589 homes changed owners.
The 191 condominium sales closed during June were down one transaction or 0.5 percent from a year ago and up 7.9 percent from this June. It was the second highest condo tally this year. Condo sales are up 81.9 percent and single-family sales have increased 82.4 percent from their respective record lows for this cycle, both of which came in January 2008.
“It’s stunning how few homes are listed for sale,” said Wendy Silver-Hale, president of the Southland Regional Association of Realtors, “Even so, we are seeing significant increases in sales and prices. What everyone has been wishing for is coming to fruition.”
Silver-Hale noted that there is a “great decrease in the number of foreclosures and short sales,” with standard sales — traditional owners who have equity in their property — outstripping the combined total of local distressed sales.
Of the 780 transactions, 38.2 percent were standard sales, a number that was up from the 37.1 percent reported in June. Short sales captured 14.6 percent of the total while Real Estate Owned sales, foreclosed properties being sold by lenders, accounted for 11.5 percent.
“The good news is that sales and prices are on the rise,” said Jim Link, the Association’s chief executive officer. “The bad news is there’s not much to sell.”
Indeed, the 1,461 active listings on the local Multiple Listing Service operated by the Association fell 55.5 percent from a year ago and was the lowest total since SRAR started keeping the statistic in 1986. It surpassed the prior low of 1,492 active listings reported in March 2004. For comparison, the record high of 14,976 came in July 1992.
At the current pace of sales the inventory represents a 1.9-month supply, a number suggesting sellers’ have an advantage. The inventory has been plummeting virtually nonstop since hitting its peak for this cycle of 7,730 listings in October 2007. That represented a 16.0-month supply at the then current pace of sales.
Link and Silver-Hale agreed that owners with equity in their property and a desire to move to a different house would be well advised to act now.
“There is an increased demand for homes, interest rates remain near historical lows, and prices are highly favorable,” Link said. “Waiting longer will not yield an advantage.”
Silver-Hale concurred: “With the increases we’re seeing, waiting until next year may mean homes a buyer can afford today may be out of reach by this time next year.”
The median price of the 589 single-family homes that changed owners last month came in at $392,000. That was up 8.7 percent from a year ago, the Association reported. The condominium median of $236,000 was up 2.6 percent. Both are up from their record lows for this cycle: up 15.6 percent for homes and 27.6 percent higher for condos, set in December 2011 and May 2009, respectively.
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.