Home and condominium resale prices throughout the San Fernando Valley soared during June while limited inventory, rising prices and higher interest rates on home loans yielded only modest increases in sales, the Southland Regional Association of Realtors reported Monday, July 28.
A total of 544 single-family homes closed escrow last month, up 3.8 percent from a year ago. The total was down 9.9 percent from the prior month, a decline that follows a seasonal pattern with sales peaking in the month of May. Plus, May’s total of 604 sales was the highest tally in seven months. June home sales also were up 68.4 percent from the record low for this cycle of 323 sales set in January 2008.
Similarly, condominium sales of 228 units were up 28.8 percent over a year ago, but down 9.9 percent from this May. The June condo total was 117.1 percent higher than the record low of 105 sales, which also came in January 2008.
“June saw a very slight improvement in the inventory, yet there are so still so few properties listed for sale and such heavy demand for housing, that prices continued to rise rapidly,” said Sharon Barron, president of the 9,000-member Southland Regional Association of Realtors. “Each increase in prices means there are fewer owners underwater, which should translate into additional listings as those owners decide to explore their options.”
The Association reported a total of 1,329 properties listed for sale on its Multiple Listing Service, which remains the best way to market a home for sale. The total was the highest in nine months. Nonetheless, the active listing tally was down 11.8 percent from a year ago, and represented a 1.7-month supply at the current pace of sales. A six-month supply represents a balanced market.
“Recent hikes in the interest rates may have some dampening effect on the market recovery.Higher interest rates, coupled with higher prices means buyers qualify for a lower purchase price,” said Jim Link, the Association’s chief executive officer. “However, rates are still just over 4 percent, so any resulting slow down in sales may allow inventory to grow, while easing pressure on prices, which have been posting unsustainable increases.”
June’s single-family median price of $507,500 was up 27.2 percent over a year ago, but was down 2.4 percent from May’s median of $520,000, which was the highest median price and the first time it broke the $500,000 benchmark since February 2008. The median was up 49.6 percent from the record low for the cycle of $339,000, yet down 22.6 percent from the record high of $655,000.
The condominium median price jumped 30.7 percent to $320,000. It was the second consecutive month the condo median came in above $300,000 and the highest monthly median since February 2008. The condo median was up 73.0 percent from the record low, yet down 22.9 percent from the record high.
Standard sales during June hit the highest mark since SRAR started keeping this statistic one year ago. Of the 772 closed escrows, 78.4 percent were standard sales; 13.9 percent were short sales; and, 7.1 percent were REOs. That marks the lowest level for REOs and a steep decline for short sales, which in December made up 24.6 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.
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