Even with a tight inventory, sales of existing single-family homes and condominiums throughout the Santa Clarita Valley increased sharply during 2012, the Southland Regional Association of Realtors reported on Tuesday, Jan. 29.
Local Realtors negotiated a total of $1.1 billion in real estate transactions during 2012, up from the $1.01 billion of 2011. Those totals do not include the millions of additional economic activity that emerge from housing transaction in, for example, sales of appliances, construction and landscaping.
A total of 2,308 single-family homes changed owners last year, an increase of 8.1 percent over 2011. It was the second consecutive year of annual gains and the highest annual sales total since 2006. 2012 ended on an exceptionally strong note with the 247 sales reporting in December up 13.8 percent over December 2011. It was the highest monthly total in six years.
Similarly, the 1,026 condominiums that changed owners during 2012 increase 15.5 percent over the prior year for the best annual total in six years. The 120 condos that closed escrow during December were up 13.8 percent over December 2011 and 47.9 percent higher than November. It was the highest monthly condo total since 2006.
“Today’s trend toward abysmally low active inventory numbers was foreseen and will be with us for some time to come,” said Bob Khalsa, the 2013 president of the Association’s Santa Clarita Valley Division. “While sales of distressed properties, both foreclosures and short sales, are declining, the local market will regain stability when sales go to more buyers seeking primary residences and fewer to investors.”
Khalsa said he’s witnessed up to a 30 percent increase in the rental market since 2008.
“When primary residence purchases show month-over-month increases, slow climb though it may be, we’ll get real stability in the housing market,” Khalsa said.
The region’s active inventory of homes listed for sale declined by 66.7 percent during December to 320 active listings, which was the fifth consecutive monthly record low. It was also the fifth consecutive month with a drop compared to the prior year exceeding 60 percent. At the current pace of sales, the activity inventory represents a mere 0.9-month supply, which also was a record low. A balanced market emerges with an inventory in the 5- to 6-month range.
“Record-low inventory combined with years of pent-up demand in a highly desirable community like Santa Clarita inevitably trigger price increases and multiple offers,” said Jim Link, the Association’s chief executive officer. “Tight loan underwriting rules along with few properties available for sale, partly caused by the ongoing presence of underwater homeowners, keep the market from moving forward faster.
“Still, prices are slowly moving higher,” Link said, “especially as multiple offers pop up on most properties.”
The annual median price of single-family homes increased by 0.7 percent last year to $367,467. It was the first increase in the annual median price after five consecutive years of declines, including a 22.0 percent plunge in 2008. The $403,500 monthly median price posted in December was up 18.7 percent over the prior December, topping the benchmark $400,000 figure for the first time since November 2010.
With distressed condo sales still a strong presence through 2012, the annual median price of condos sold last year came in at $192,158, down 8.8 percent from 2011. It was the second consecutive decline in the annual condo median and fifth annual decline of the last six years.
Khalsa and Link agreed that 2012 saw the housing recovery take hold, with most analysts saying February was the turning point. Both expected 2013 to show continued improvement as distressed sales recede further, underwater owners see their position improved by rising prices, and existing owner gain confidence to list more properties for sale.
“The market is still wrestling with issues,” Khalsa said, “but the worst is past with better days ahead.”
Of the 364 property that changed owners last month, 42.3 percent were standard sales, 41.2 percent were short sales, and 13.2 percent were foreclosures.
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.