Despite an exceedingly limited inventory, home and condominium sales during January throughout the San Fernando Valley increased, while the median price of homes sold posted the highest number since August 2008, the Southland Regional Association of Realtors reported on Tuesday, March 19.
The February single-family median price of $422,000 was up 18.9 percent compared to a year ago. It was the second consecutive month the median exceeded the $400,000 benchmark after years of lingering in the low- to mid-$300,00 range.
The condominium median price of $260,000 was 30.1 percent higher than February 2012. While down 7.1 percent from January, the February median has not posted a higher number for the month since the $330,000 median of 2008.
Both numbers were up sharply from the record lows for this cycle: the condo median was 40.5 percent above the record low of $185,000 set in May 2009; while the single-family median was 24.5 percent above the December 2011 low point of $339,000.
“The market is gaining momentum with activity increasing in all price ranges,” said Sharon Barron, president of the Southland Regional Association of Realtors. “The lack of active listings impedes recovery while fueling across-the-board price increases as multiple offers, many coming from investors offering all cash, often push the sale price above the asking price.”
A total of 381 single-family homes changed owners last month, up 0.3 percent compared to February 2012, while the 163 condominium sales were up 14.0 percent. Condo sales were up 55.2 percent while home sales were 18.0 percent above their record lows for this cycle, with both lows coming in January 2008.
“Even borrowers with stellar credit, ample savings, and an excellent income continue to have difficulty landing a home loan,” said Jim Link, the Association’s chief executive officer, noting the real estate industry’s ongoing campaign urging regulators and lenders to return to fair yet secure loan underwriting standards. “Regardless, the lack of listings is the number one issue limiting the local market recovery.
There were 1,033 active listings throughout the San Fernando Valley at the end of February. That was down 49.3 percent from a year ago and represented a mere 1.9-month supply at the current pace of sales. A supply of 5- to 6-months is needed to have a balanced market. The inventory over the last two months has picked up slightly from the record low 995 listings of December, yet active listings come nowhere near meeting burgeoning demand.
Link and Barron attributed the lack of listings to multiple factors; lead by the fact an estimated 20 percent of homeowners are still underwater, meaning the outstanding loan is higher than the home’s current resale price.
“Limited inventory in the face of heavy demand pushes prices higher,” she said. “Higher prices boost consumer confidence while also lifting some owners above water, perhaps even allowing them to again start building equity.”
As distressed sales decline and more people gain equity in their property, Barron expects to see an increase in listings.
Of the homes and condominiums sold last month, standard buyers purchased 64.7 percent. Approximately 20.7 percent of sales were short payoffs, where the lender allows a home to be sold for less than the outstanding mortgage. And, 13.9 percent were REOs, real estate owned properties held by lenders that they typically acquired via foreclosure.
Standard sales have been rising — up from 37.1 percent in June — as foreclosures have receded and lenders have gradually grown more receptive to 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.