A declining inventory of properties listed for sale slowed the local home resale market during November and contributed to a 5.9 percent increase in the median price of single-family homes, the Southland Regional Association of Realtors reported on Wednesday, Dec. 26.
A total of 167 homes changed owners, down 15.7 percent from a year ago. The drop follows seasonal patterns, yet more likely reflects the record-low inventory. Nonetheless, November home sales were up 68.7 percent from the record low for this cycle.
“The homes that closed escrow have been in the works for months and the sales total does not fully reflect demand from buyers,” said Erika Kauzlarich-Bird, president of the Association’s Santa Clarita Valley Division. “Multiple offers are common as a pent-up demand generates incredible interest on virtually every property.”
Any homeowner who is even remotely thinking about moving, especially owners with equity in their property, should considering listing their home to take advantage of today’s once-in-a-generation opportunity, Kauzlarich-Bird said.
The inventory of homes and condominiums listed for sale at the end of November set a fourth-consecutive low. There were a mere 332 active listings at the end of the month, down 68.0 percent from a year ago. The last four months have seen the inventory decline top 60 percent, while the three months prior saw 50 percent or greater drops.
At the current pace of sales, the inventory represents a record-low 1.4-month supply. The slide started in September 2011 and then accelerated beginning this February, just as the buyers started returning in droves and sales accelerated.
The 78 condominiums that closed escrow during November were up 20.0 percent over November 2011. Nearly two-thirds of those sales — 61 percent — were short sales, where lenders allow a sale at a price less than what is owed. The surge in condo short sales that typically take many months to gain approval may have been driven by a desire of sellers to close escrow while they can still avoid having to pay tax on the difference between the sale price and the outstanding loan balance.
Jim Link, the Association’s chief executive officer, noted that debt forgiveness on short sales expires on Dec. 31, although Realtors are urging Congress to extend it as part of negotiations over the national debt.
“The local housing market is doing just fine and will continue to improve in 2013 if Congress does its job and avoids making drastic changes,” Link said. “Keeping the tax deductibility of interest on home loans and extending tax debt forgiveness in short sales are critically important if housing is to fully recover.”
The median price of single-family homes came in at $360,000, up 5.9 percent from a year ago and unchanged from October. The median has been bobbing up and down for most of this year, peaking at $378,100 in March. It is up 5.9 percent from the record low for this cycle set in Ovember 2011 of $340,000.
The condominium median price of $197,000 was down 1.5 percent from November 2011 and off 1.5 percent in large measure because of the predominance of short sales. Nonetheless, the condo median price was up 15.9 percent from the record low, set in July at $170,000.
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.