The median price of homes sold during April throughout the San Fernando Valley registered its highest number since October 2007 while home and condominium sales were virtually unchanged from year ago levels, the Southland Regional Association of Realtors reported on Thursday, May 28.
The April median price of single-family homes of $555,000 was up 6.9 percent over 12 months ago and 3.4 percent higher than this March. It marked the 14th consecutive month the home median was above the $500,000 benchmark and the first time since 2007 it was above $550,000.
The condominium median price of $350,000 was up 12.2 percent over April 2014, with this April being the highest since September 2008.
“The 6.9 percent increase in the home median price continues a trend that began in May 2014 when double-digit monthly increases largely vanished,” said Gaye Rainey, president of the Association. “The pace of price increases clearly is slowing, which would be welcome news to prospective home buyers.”
The single-family home and condominium prices remain 15 percent below the record highs set in the boom market of the 2000s, with the home price record of $655,000 established in June 2007 and the condo high of $415,000 coming in February 2006.
Rainey and Jim Link, the Association’s chief executive officer, noted that prices are being pushed higher by a still-too-tight supply of units listed for sale.
“The lack of supply limits sales, even though the April inventory hit its highest level in five months, it still is not enough to satisfy demand,” Link said, “As resale prices rise, affordability becomes an issue for buyers, even with interest rates still extremely low. We’re seeing strong activity in the upper price ranges, but it trails off in mid-range to entry-level priced homes.
“It could be there’s a change in attitudes about buying, or memory of the recession still lingers, or an inability to save for a down payment,” Link said, “but it seems that younger buyers are remaining longer as renters, even though there’s a huge differential between the benefits of owning versus renting.”
After 19 consecutive months of the inventory posting year-to-year increases—beginning in July 2013 through January 2015—this April’s supply marked the third consecutive month where the inventory decline from year ago numbers. The declines were single-digit, yet come at a time when more listings are needed to take pressure off prices.
There were 1,543 active listings at the end of April, down 3.5 percent from a year ago. At the current pace of sales, that represents a 2.1-month supply when a 6-month supply is needed to bring balance to the market.
Indeed, Link and Rainey agreed that the lack of inventory limited sales during April. A total of 543 single-family homes changed owners, off three sales or 0.5 percent from a year ago, but up 1.1 percent from this March. Similarly, 181 condominiums closed escrow during April, off 1.1 percent from a year ago, yet up 8.4 percent from March.
Pending sales, a measure of future activity, have posted positive number for five consecutive months. There were 866 pending sales at the end of April, up 8.9 percent from a year ago. Until the recent increases in pending sales, which started in December, pending sales, with only a few exceptions, had been posting year-to-year declines dating back to May 2010.
Distressed sales continued to have a diminishing impact on the local market. Short sales, where a lender agrees to accept a sale price lower the outstanding loan balance, were at their lowest levels since the Association started tracking types of sales in June 2012. Of the total 724 home and condo transactions, 36 were short sales or 5.0 percent of the total, 23 were foreclosure-related, while standard sales captured 90.7 percent, which is about where it’s been hovering since October 2014.
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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