Single-family home and condominium median resale prices posted double-digit gains throughout the San Fernando Valley during August as sales declined largely because the local inventory fell to a record low for the second consecutive month, the Southland Regional Association of Realtors reported on Thursday, Sept. 20.
The single-family median of $396,000 was up 10.6 percent from a year ago and 1.0 percent higher than this July. The condo median of $245,000 jumped 20.1 percent over August 2011 and 3.8 percent over July. Both median prices have been bouncing up and down for months while trending higher since hitting bottom in December 2011 and May 2009, respectively.
“With inventory posting month-after-month declines of 50 percent or more, is it any wonder that sales are slowing while prices are rising?” said Wendy Silver-Hale, president of the Southland Regional Association of Realtors. “Most of the homes listed for sale see multiple offers that often push the purchase price above the initial list price.
“Many people want to take advantage of today’s historically low interest rates on home loans and high housing affordability,” Silver-Hale said. “Owners with equity in their property and a desire to move or upgrade are missing a great opportunity if they fail to list their homes for sale now.”
A total of 578 homes changed owners last month, down 6.5 percent from a year ago. The 173 condos that closed escrow during August were off 21.7 percent from the same period in 2011.
The drop in sales is consistent with traditional seasonal patterns, with summer months the busiest then tapering off as the year progresses. Nonetheless, Silver-Hale and Jim Link, the Association’s chief executive officer, said, considering the pent-up demand, sales would be higher except for a slim inventory unlike anything ever seen before.
“Inventory is falling partly because there has been a drop in the number of bank-owned properties coming on the market,” Link said. “Traditional equity sales are rising and inventory will gain further momentum as prices increase enough to give owners who owe more on their home than its current resale value a chance to sell.”
A mere 1,322 properties were listed for sale at the end of August. That was down 58.2 percent from a year ago, hitting the lowest level on record. The prior record of 1,461 came this July, beating the 1,492 listings set in March 2004, just as the housing boom was getting into full stride.
At the current pace of sales the inventory represents a 1.8-month supply, its lowest number since 2005. Inventory peaked in October 2007 with 7,730 listings, which was a 16.0-month supply at the then current pace of sales. A normal inventory would be in the 5- to 6-month range.
Traditional equity sales accounted for 39.7 percent of activity last month, the Association reported. That was up from 35.6 percent in July and 36.8 percent in June.
Real estate owned sales — property held by banks that typically is acquired via foreclosure — represented the smallest percentage of sales, a mere 8.3 percent. That was down from 10.3 percent in July and 11.5 percent in June.
Short sales — where lenders allow owners to sell for less than what is owed — captured 14.8 percent of the San Fernando Valley resale market. That number was virtually unchanged from June and July even though more lenders appear to be willing to allow short sales.
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.