Sales of existing single-family homes in the Santa Clarita Valley during April increased 18.8 percent, while resale prices rose 10.7 percent due to heavy demand and an extremely limited inventory of homes for sale, the Southland Regional Association of Realtors reported on Wednesday, May 29.
A total of 209 homes changed owners last month compared to the 176 sales of April 2012. Sales also increased 4.5 percent from this March. While still down 48.1 percent from the record high of 405 sales in June 2005, the April tally was up 111.1 percent from the record low of 99 sales in January 2008.
Similarly, 108 condominiums closed escrow in April, up 6.9 percent from a year ago and 13.7 percent higher than March. The April total was 47.1 percent below the record high of 204 sales set in April 2003, yet up 248.4 percent from the record low of 31 sales of January 2008.
“This activity comes as no surprise. It was expected, simply because some families have been unable to buy for years and Santa Clarita, more than ever, remains a popular place to live,” said Bob Khalsa, president of the Association’s Santa Clarita Valley Division. “Yet, we’re far from a normal market, which won’t appear until more current owners are above water and homebuyers are not pushed out by investors, especially in homes priced under $450,000.”
Khalsa said investor activity is a smaller factor in higher price ranges simply because it’s more difficult to break even, let alone show the type of profit that triggers investor interest. Investors have a stronger presence in entry-level price ranges where they often beat out traditional buyers with all-cash offers and where foreclosures and short sales, while diminished, remain a factor.
“We’re in uncharted territory,” Khalsa said, “and will remain there due to a still unstable jobs market.”
Jim Link, the Association’s chief executive officer, noted that the buyer interest that has generated multiple offers on virtually every property and driven prices higher is likely to abate as pent-up demand is satisfied.
“The market won’t cool off, but should gradually be more stable, where it’s not such a frenzy,” Link said. “That will happen as more owners regain equity in their property and inventory rises, which should satisfy most of the demand that has spiked activity.”
A mere 338 properties were listed for sale at the end of April on the Association’s Multiple Listing Service, which remains the best way to market real estate. The inventory was down 49.9 percent from a year ago, and was a 1.1-month supply at the current rate of sales when a 6-month supply is needed for a balanced market.
With few properties to satisfy legions of prospective buyers, the median price of single-family homes sold last month was $415,000, up 10.7 percent from a year ago. It was off slightly, down 1.2 percent, from the March 2013 median of $420,000, which was the highest since July 2010.
The median price of condos that changed owners in April came in at $241,000, up 23.6 percent over April 2012. Home and condo prices are well below their boom-era highs — down 35.5 percent and 39.3 percent, respectively — yet median prices have increased 22.1 percent and 41.8 percent from their record lows.
Khalsa noted that many condominium homeowner associations throughout the Santa Clarita Valley are still struggling with little or no reserves to pay for improvements while the percentage of renters in condos purchased by investors increases, making it more difficult to land FHA financing, a primary vehicle used by entry-level homebuyers.
Even as some underwriting rules are being eased, Khalsa said: “Homeowner associations won’t stabilize until owners are confident they can pay their loans and monthly dues.”
Association statistics showed distressed sales remain a factor, but standard equity sales are making a comeback.
Of the 317 total closed escrows throughout the Santa Clarita Valley during April, 60.9 percent were standard sales; 24.3 percent were short sales; and 14.5 percent were foreclosures. Distressed sales combined accounted for 38.8 percent of all April transactions, which as a remarkable improvement from just November, when distressed sales held 59.9 percent of the local market.
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.