The number of homes and condominiums listed for sale throughout the San Fernando Valley during January hit benchmarks not seen for many years, the Southland Regional Association of Realtors reported on Friday, Feb. 27.
The 1,453 properties active on the Association’s Multiple Listing Service were up 12.0 percent from a year ago. Virtually uninterrupted monthly declines in the inventory since 2008 ended in June 2013. January’s increase represented the 19th consecutive month the inventory has come in higher than the prior year.
Plus, a key benchmark hit its highest number in nearly three years. The January inventory represented a 3.3-month supply, the highest since February 2012. An ideal supply which suggests a balanced market is about a six-month supply, but the January level is a welcome increase after three years of a supply in the 1- to 2-month range.
“Local real estate markets throughout the nation, and especially here in the San Fernando Valley, appear poised for a long run of normal activity, enough of these crazy boom and bust cycles,” said Gaye Rainey, president of the 9,100-member Association. “Investors and distressed properties are gone, price increases have moderated, sales are decent, and buyers move quickly whenever a properly-priced home or condo hits the market. Normalcy can be dull, but it most certainly will be welcome.”
The median price of single-family homes sold during January in the Valley came in at $510,000, up 5.2 percent over January 2014, but off 2.1 percent from December. The median peaked at $543,000 in August and has been drifting lower since, although some months have come close to that number. The January median was the lowest since March of last year.
The condominium median price of $329,000 was up 4.4 percent from a year ago and off less than 1 percent from December. The condo median hit its post-recession high at $335,000 in August 2013 and has been bouncing around under that number since.
“I sense that consumers are finally adjusting to this market,” said Jim Link, the Association’s chief executive officer. “Buyers and sellers understand there will be negotiations, trade offs, and limits on the asking price and what buyers are willing to pay.
“Barring crazy stuff happening in the economy,” he said, “this will be a decent year for local residential sales, with moderate price increases and an inventory growing just enough to meet reasonable demand.”
January home sales throughout the Valley were sluggish, with a record low 307 single-family home sales and 133 condominium closed escrows. Both were 12 percent below year-ago totals.
Link and Rainey agreed that inventory had been holding the market back and more properties may come on the market sometime in the future as investors, large ones and mom and pop, decide to capture a profit from properties purchased at a discount after the recession.
“No doubt some will be held as rentals, which come at a premium throughout Los Angeles,” Link said. “Yet at some point investors will want to capture the appreciation. The eventual sale of those properties may well be all that remains of the recession.”
Pending escrows, a measure of future resale activity, were up 8.6 percent over a year with 622 open escrows throughout the San Fernando Valley.
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.