A lack of inventory due, in part, to the steady drop of distressed properties, limited single-family home sales in the Santa Clarita Valley during 2013, while condominium closed escrows surged and home and condo prices increased sharply, the Southland Regional Association of Realtors reported Thursday, Jan. 16.
The total 3,389 home and condominium sales negotiated during 2013 by Santa Clarita Valley Realtors generated $1.4 billion for the local economy, not including the many millions more in related services and home products that result when properties change owners.
Of those transactions, 2,270 were single-family homes, down 1.6 percent compared to 2012 when 2,308 homes closed escrow. The decline was the first after two consecutive years of gains in 2011 and 2012, which posted sales hikes of 2.6 percent and 8.1 percent, respectively. For comparison, annual local home sales peaked with 3,869 closed escrows in 2004.
“While demand was heavy with multiple offers common during much of 2013, a restricted inventory, tight credit, and rising resale prices limited home sales,” said Nancy Starczyk, the 2014 president of the Santa Clarita Valley Division of the Southland Regional Association of Realtors.
“The inventory shortage was heightened as the number of distressed sales and foreclosures fell,” Starczyk said, “and existing owners hesitated to sell due to uncertainties lingering from the Great Recession.”
Buyers flocked to the generally more affordable condominium market during 2013 where the 1,189 condominium sales were up 15.9 percent over 2012, making it the fifth consecutive year that condo sales posted increases. It was also the second consecutive year where the condominium increase exceeded 15 percent and the total topped the 1,000-sale benchmark. The record-high condominium annual sales total of 1,852 closed escrows occurred in 2003.
“2014 will see further improvement in the local, state, and national residential resale market,” said Jim Link, the Association’s chief executive officer. “Sales will probably match 2013 or come in possibly higher if more current owners decide that now is the right time to jump into the market, especially with an increase likely in interest rates sometime this Spring.
“However, prices will continue to rise, but at a slower rate than 2013,” Link said. “What happens with federal housing policy remains the major wild card, and no one yet knows how new federal ‘ability-to-repay’ rules will impact access to credit.”
Resale prices of homes and condominiums posted sharp gains during 2013. The annual median price of all single-family homes sold last year throughout the Santa Clarita Valley came in at $421,625. That was up 14.7 percent over 2012 and the second consecutive year the annually rose after five years of declines. While up from the low point of the recession, when the annual median price dropped to $364,867 in 2011, the 2013 annual median remained well below the record high of $603,492 set in 2006.
The condominium annual median price increased a whopping 33.8 percent over 2012 to $257,142. It was the first year the condo annual median rose after declines in five the prior six years. The condo annual median hit bottom in 2012 at $192,158. The record high came in 2006 with an annual median of $380,583.
The lack of inventory restricted sales and pushed home and condo prices higher, although beginning in July the total active inventory started to post increases, albeit increase that came after the inventory hit a record low in the first half of 2012. December ended with 472 active listings throughout the Santa Clarita Valley. That was up 47.5 percent over December 2012, yet well short of the 5.0-month supply that represents a balanced market. The December inventory was a mere 1.4-month supply.
Link and Starczyk said despite lingering issues, the local housing market continues to move to a stronger, more stable position as foreclosures and short sales diminish and standard sales surge. Of the total 348 properties that changed owners in December, seven sales or 2.0 percent were Real Estate Owned, properties acquired by lenders typically through foreclosure. That was the lowest REO total since the Association started keeping the statistic.
Short sales, where the lender agrees to a home sale for a price less than the outstanding loan balance, accounted for 23.6 of December activity, for a total of 82 home and condominium closed escrows. That number was higher than expected after five months with short sales coming in under 20 percent of the total. Short sales peaked at 47.9 percent in November 2012.
Standard sales, involving a traditional buyer and seller, with limited and diminishing investor involvement in the market, accounted for 73.9 percent of all December closed escrows. The Association’s record-low for traditional sales of 34.9 percent came in September 2012.
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.