Even as home and condominium sales throughout the San Fernando Valley slowed during November, median prices climbed higher, the Southland Regional Association of Realtors reported Tuesday, Dec. 30.
The median price of homes that closed escrow during November came in at $536,000, up 11.7 percent over a year ago and 3.7 percent ahead of this October. The highest median price seen since the economic recovery began came in August at $543,000. The November home median was up 58.1 percent from the recession low of $339,000, set in December 2011, but remained 18.2 percent below the boom high of $655,000, set in June 2007.
Similarly, the condominium median price of $325,000 was up 8.3 percent over November 2013 while rising 2.5 percent from October. That was 75.7 percent better than the record low of $185,000 in May 2009, but 21.7 percent short of the high $415,000 set in February 2006. The highest condo median price seen since the recovery began also came in August at $331,000.
“2014 will end with prices up and sales well below expectations,” said Roger Hance, the 2014 president of the Southland Regional Association of Realtors. “Higher prices benefit sellers, but put buyers in a position where the down payment becomes much more of an issue, even as home interest rates remain near record lows.”
Neither Hance nor Jim Link, the Association’s chief executive officer, expect prices to anytime soon match or surpass the peak years of 2007 and 2008.
“Prices were overinflated then and if they came near those peaks now would hamper the ongoing market recovery,” Link said. “That’s already evident as sales fell below expectations during 2014, with buyers concerned about overpaying for properties, especially now that bargain-priced distressed homes have largely vanished.
“We’ll see an increase in home and condo sales during 2015,” Link said, “but it will be a slow, steady increase, a moderate year with sales up slightly and prices rising less than 10 percent.”
Link and Hance agreed that moves by federal regulators to expand access to down payments of as small as 3 percent to qualified buyers should help the market, noting that there are a lot of first-time buyers who want a home and have a good job, steady income and excellent credit history, yet little excess income to save toward a down payment.
A total of 420 single-family homes changed owners during November. That was down 10.3 percent from a year ago. Condo sales totaled 154 units, down 8.3 percent compared with November 2013, but up 1.3 percent from this October.
The active inventory of homes listed for sale was 1,745 units, up 23.8 percent over a year ago. The total was down from larger inventories reported earlier this year, but at the current pace of sales represented a 3.0-month supply, which was the second highest posted so far in this recovery, behind only the 3.2-month supply reported in February. A 6-month supply is ideal.
Distressed sales continued to fall off the charts. Standard sales, involving traditional home buyers, came in at a record 91.6 percent of total residential closed escrows. Foreclosure-related sales accounted for a mere 2.4 percent of total November activity, and short sales held 5.6 percent of the market.
The Southland Regional Association of Realtors® is a local trade association with more than 9,100 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.