Home and condominium sales in the San Fernando Valley slowed during November as buyers wrestled with rising resale prices, a limited inventory, and the approach of the holidays, the Southland Regional Association of Realtors reported on Wednesday, Dec. 18.
A total of 468 single-family homes changed owners, down 16.1 percent from a year ago and off 10.2 percent from this October. Sales typically fall at this time of year as seasonal forces take hold. Nonetheless, the November tally was 44.9 percent above the January 2008 low point as the recession swept across the country.
Realtors also closed escrow on 168 condominium sales during November, off 9.7 percent from a year ago and down 17.2 percent from this October. November condo sales were up 60.0 percent from the depth of the Great Recession.
“The outlook for housing in 2014 is bright given expected growth in the economy and progress on the political front in D.C.,” said Sharon Barron, president of the Southland Regional Association of Realtors. “Demand will pick up as Spring approaches, with sales tempered by a larger, though still limited, inventory, slightly higher interest rates on home loans, and rising resale prices.”
The median price of single-family homes that closed escrow in November came in at $480,000, up 20.3 percent from a year ago and 3.2 percent higher than this October. It was the second consecutive month below $500,000 following five consecutive months above that benchmark, which peaked in May and September with identical medians of $520,000.
The condominium median price of $300,000 was up 22.5 percent over November 2012, yet fell 9.1 percent from this October. The condominium median hit its high at $335,000 in August before tapering off as distressed sales diminished.
Of the total 635 closed escrows during November, 83.2 percent were standard sales; 11.9 percent were short sales; and, 3.9 percent were foreclosures, which was the lowest number of foreclosures since the Association started keeping the statistic in 2012.
“The challenge in the coming months will be to find a healthy balance so that prices can continue to recapture lost ground, which will help owners who are still underwater, while not rising so high that too many families are priced out of the market,” said Jim Link, the Association chief executive officer.
Link and Barron agreed that underwater owners — who some reports say represent less than 13 percent of local homeowners after being close to a third of owners two years ago — may hold the key to what happens in the New Year.
“As Spring approaches owners who again have equity may be eager to sell,” Link said. “That will enlarge inventory while also releasing pressure on prices.”
At the end of November the Association reported 1,410 active listings, up 22.6 percent from a year ago, but well below an inventory large enough to satisfy demand, albeit even demand that currently generates fewer and fewer multiple offers.
At the current pace of sales the inventory represented a 2.2-month supply, which was identical to the October figure and the fourth consecutive month above the 2.0-month benchmark. A market where neither owners nor sellers have a clear advantage has a chance to emerge with a 6-month supply or more than 4,000 listings.
In addition to seasonal factors and waning investor interest, Link said that there are fewer multiple offers now because some owners have pushed the list price too high too fast, which is a course of action guaranteed to limit the chance of a sale.
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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