2012 ended on a high note for home and condominium sales throughout the San Fernando Valley with resale prices and sales up despite a record-low inventory, the Southland Regional Association of Realtors reported on Tuesday, Jan. 29.
Members of the Southland Regional Association of Realtors negotiated sales of 13,497 existing single-family homes and condominiums during 2012 throughout the region, an increase of 15.1 percent over 2011.
The median price of those properties, excluding new home sales, rose 11.7 percent for a total dollar value of $5.4 billion, not including the millions more that home sales generate for the local economy in related services, such as construction, landscaping and appliance purchases.
Within the boundaries of the San Fernando Valley, the Association’s primary service area, Realtors closed escrow on 6,333 single-family home sales during 2012, which was virtually unchanged from the 2011 total, yet a marked improvement after two consecutive years of annual declines. December saw home sales increase 2.4 percent over the prior year and rise 6.6 percent ahead of November; an unusually strong closing for what typically is a slow time of year for home sales.
Condominium annual sales, which suffered the most due to the tight inventory and diminishing foreclosures, totaled 2,203 closed escrows, down 6.3 percent from the 2011 annual total for the third consecutive annual decline. After hitting a record high 5,041 annual condo sales in 2002, condo annual activity has fallen in every year except 2009.
“There’s consensus that the recovery of the local real estate market started in February 2012,” said Sharon Barron, the 2013 president of the Association, “yet by mid-year, the severe shortage of homes and condos listed for sale was the primary impediment to full recovery.”
Barron and Jim Link, the Association’s chief executive officer, agreed that 2013 would see continued improvement in sales and a gradual expansion of the inventory as consumers gain confidence in the local and national economies.
“There’s plenty of pent-up demand for housing with buyers flocking to every new listing and multiple offers pushing prices above initial asking prices,” Link said. “Yet with inventory tight and underwriting rules for home loans even tighter, neither sales nor prices will race out of control. The gains will be slow, incremental improvements, nothing like the out-of-control years of the last decade.”
The annual median price of the homes sold during 2012 increased 5.7 percent to $383,700, up from $363,117 in 2011. It was the second year in the last five to see an increase in the median price, which means half the sales were higher and half lower. The December median home price came in at $390,000, up 15.0 percent over the prior year.
Similarly, the condominium annual median price of $232,892 was up 7.1 percent over 2011; it was the second year of the last six years to post an increase. The December condo median increased 13.7 percent to $249,000, the highest monthly median since September 2008.
The inventory continued to vanish with the 995 active listings at the end of December throughout the San Fernando Valley setting the fifth consecutive monthly record low. It was the first time since the Association starting keeping the statistic in 1986 that active listings fell below the 1,000 benchmark. At the current pace of sales, the inventory represents a mere 1.2-month supply. A 5- to 6-month supply is considered desirable.
As the market continues its recovery, standard sales are capturing a larger percentage of total activity. Standard sales represented 58.5 percent of total closed escrows last month, while short sales increased to 24.6 percent and properties sold by lenders through foreclosure represented 13.5 percent of all transactions.
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.