A total of 149 single-family homes changed owners in the Santa Clarita Valley during January, up 2.1 percent from a year ago and the highest tally for the month since January 2007, the Southland Regional Association of Realtors reported Thursday, Feb..
Realtors also closed escrow on 59 condominium sales, down 7.8 percent from a year ago.
Both categories were down from December totals, which followed seasonal patterns, yet the drops — 39.7 percent and 50.8 percent, respectively — were more pronounced because this December was one of the busiest months in years — the strongest indicator to date of the ongoing recovery of the local home resale market.
“While not as dramatic as December, January home sales produced the best total for the month in six years,” said Bob Khalsa, president of the Association’s Santa Clarita Valley Division. “There are plenty of buyers out there, traditional as well as investors, yet inventory is so low and lending standards still so high, that we’re unable to satisfy demand.
“If you have equity in your house, along with a desire to make a change, it’s a great time to list for sale,” Khalsa said. “You’ll benefit on both transactions, and capture a low interest rate. Listing now positions you for the busy Spring homebuying season.”
Indeed, the lack of inventory is the major factor slowing the ongoing market recovery, a reality that may push prices higher and faster than a more balanced process.
There were 325 active listings at the end of January, down 65.6 percent from a year ago and a mere 1.6-month supply at the current pace of sales. That was up from the record low 320 active listings in December — the fifth consecutive record low — yet still well below the 5- to 6-month supply that represents a balanced market.
With tight loan underwriting rules limiting options for the swelling ranks of traditional buyers, investors with all-cash offers are casting their vote of confidence in the local market.
Khalsa said he listed a property at 8 p.m. Monday only to have 12 offers on it by 2:30 p.m. Tuesday, with six more prospective buyers clamoring to view the property. None of the buyers who made offers had even seen the property; all 12 were all-cash offers; and, all of the offers were at list price, with the exception of one offer, which was significantly higher than list.
“Activity is picking up in all price ranges,” said Jim Link, the Association’s chief executive officer, “yet for properties priced under $350,000 we’re seeing heavy investor activity along with plenty of all-cash purchases.”
The Association’s statistics indicated that of the properties that changed owners during January, 47.3 percent were traditional, standard purchases, 35.7 percent were short sales, where the lender allows the sale for less than what is owed, and 16.4 percent were REOs, or Real Estate Owned properties typically acquired by lenders via foreclosure.
“More and more properties are selling the traditional way,” Link said. “As that number increases, short sales and REOs will fall. That’s when you’ll see the market improve even more.”
The 149 single-family homes that changed owners last month had a median price of $360,000, which was unchanged from a year ago. The condominium median price of $206,700 was up 12.0 percent from January 2012.
With today’s heavy demand, Khalsa said there would be more condominium listings and sales if homeowner associations took steps to be FHA qualified, which would open low-cost financing to more prospective traditional buyers. “Buyers want condominiums, because they are entry-level units,” he said, “but the loan options are limited”
Failing to obtain FHA approval exacerbates the problems even for condominium complexes that meet all criteria — limiting listings and limiting sales, while making it more likely that units that do sell go to investors, who typically rent the units, thus making it even less likely financing will be available for traditional buyers.
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.