Home and condominium sales jumped during March as the traditional home buying season got off to a stronger than expected start, the Southland Regional Association of Realtors reported on Friday, April 17.
A total of 537 single-family homes changed owners last month, up 29.7 percent over a year ago March and 55.7 percent ahead of this February’s closed escrows. It was the strongest performance for the month of March since 2011.
Realtors also assisted on the sale of 167 condominiums for an increase of 22.8 percent from March 2014 and 10.6 percent above this February.
“If spring 2014 saw sluggish sales and reticent buyers,” said Gaye Rainey, president of the Southland Regional Association of Realtors, “this season already is witnessing eager, enthusiastic home hunters who appear optimistic enough to open their pocket books in the wake of positive statistics on nearly all economic fronts.
“Today’s buyers are qualified—Lenders are seeing to that!—up to the challenges of home ownership, and motivated by an often overlooked traditional perspective of a house as a home and not just a piggy bank,” Rainey said.
As expected, the median price of the homes and condos sold last month posted moderate increases over a year ago. The single-family median price recorded in March came in at $536,500, up 4.2 percent over March 2014 yet well below—by 18.1 percent—the record high of the boom years.
Similarly, the condominiums that changed owners had a median price of $335,000, up 3.1 percent from a year ago, yet below its February 2006 record high by 19.3 percent.
“The market is kicking loose, as is expected at this time of year,” said Jim Link, the Association’s chief executive officer. “It’s a traditional market fueled by pent-up demand, very low interest rates, and a general feeling that the economy is fairly stable.”
Link noted that growing numbers of current homeowners are inclined to list their homes for sale now that many report positive equity.
“More owners are in an equity position where they can sell, recapture what they put into their home, and walk away with enough for a down payment on a replacement residence,” he said. “Qualifying for a loan is still stringent, as it should be. Indeed, lenders and appraisers will keep resale prices from skyrocketing, while anyone considering paying over market prices should be prepared to increase the size of their down payment if they want a loan.”
As buyers swooped into the market, the active inventory got tighter. After 19 consecutive months of increases in the inventory, February saw the inventory decline while the active inventory at the end of March was 1,439 listings, down 5.3 percent compared to March 2014.
At the current pace of sales, those 1,439 listings represent a 2.0-month supply in a market where nearly 4,300 listings, for a 6-month supply, would be needed to balance the market.
“This is a great time for current owners to list their home for sale,” Rainey said. “Most likely, it would sell quickly, get a great price, and give owners a chance to land a replacement home while interest rates on home loans remain at very low levels.”
The tight inventory appears to be one of the few lingering limitations of the recession, while distressed sales have all but vanished. Of the total 704 home and condo sales last month, only 25 or 3.6 percent were foreclosure related; 40 sales for 5.7 percent of the total were short sales; and traditional sales accounted for 634 transactions or 90.1 percent of the total.
The market is expected to stay busy through the coming months. Pending escrows, a measure of future resale activity, increased 9.6 percent at the end of March.
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.
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