With distressed home sales diminishing with each passing month, the housing market throughout the San Fernando Valley during October came in healthier and more balanced, with a strong advantage going to neither buyers nor sellers, the Southland Regional Association of Realtors reported on Tuesday, Nov. 26.
Seasonal forces, the lack of inventory, continued strong buyer demand, fewer distress properties, and fewer investor buyers, all contributed to the total of 521 single-family homes that changed owners, down 18.0 percent from a year ago, but up 3.4 percent from this September.
Condominium sales, which have been booming as entry-level homebuyers pursued their generally lower prices, were limited due primarily to a tight inventory. Condominium sales totaled 203 units, off less than 1 percent from a year ago, yet up 1.5 percent from this September. Single-family home and condominium sales are dramatically above their Great Recession lows, up 61.3 percent and 93.3 percent, respectively.
“What we’re seeing is the emergence of a pretty normal market for this time of year,” said Sharon Barron, president of the Association. “Even with a limited inventory, traditional buyers have more opportunity now that there are fewer investors trolling the waters.”
Indeed, traditional sales captured 83.7 percent of all transactions last month. That compares to a year ago October when they held a 52.9 percent market share. Foreclosure-induced sales have fallen to pre-recession levels, accounting for a mere 4.7 percent of sales last month. Short sales, where the lender agrees to a sale price less than the balance of the outstanding loan, held 10.9 percent of the market. That’s down dramatically from the 24.6 percent share of short sales reported in December.
“It’s a fairly moderate housing market that is neither a buyers’ market nor a seller’s market, even with inventory so low that you’d think it should be weighted in favor of sellers,” said Jim Link, the Association’s chief executive officer. “Buyers must accept that deep discount prices are gone and sellers who ask too high a price will see diminished activity and possibly no multiple offers.”
The wild card for housing, Link and Barron noted, remains what will happen with federal housing policy, the fate of Fannie Mae and Freddie Mac, and if interest rates will rise over the coming months.
The median price of single-family homes sold last month came in at $465,000, up 22.4 percent from a year ago, but off 10.6 percent from this September’s median, which was the highest figure recorded since the recovery began.
The condominium median price of $330,000 was up 40.4 percent from a year ago and 1.5 percent ahead of this September. The condo median was up 78.4 percent from its record low while the single-family has increased 37.2 percent from its bottom. Both remain below their record highs, down 20.5 percent and 29.0 percent, respectively.
A total of 1,559 properties were listed for sale on the Multiple Listing Service operated by the Association. That represented a 21.3 percent increase over a year ago, but was down from the 1,672 listings reported in September, which was the highest since April 2012.
At the current pace of sales, the 1,559 active listings represented a 2.2-month supply. A year ago it was a 1.5-month supply. September marked the third consecutive month the supply was at or above a 2.0-month supply. By long-term historical standards, a balance market should emerge with a 6.0-month supply.
The Southland Regional Association of Realtors® is a local trade association with more than 8,900 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
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