Single-family home sales and prices rose during May while pending sales—a measure of future activity—posted an increase for the sixth consecutive month, the Southland Regional Association of Realtors reported on Thursday, June 25.
A total of 563 single-family homes changed owners during May, up 7.9 percent over a year ago and 3.7 percent higher than this April. It was the highest monthly tally since July 2014 and the third consecutive month above the 500-sale benchmark. Month-to-month sales have posted gains every month this year.
Due primarily to a lack of inventory and rising affordability concerns, condominium sales during May totaled 163 units, off 11.9 percent from a year ago and 9.9 percent below this April.
“The market has gained momentum in recent months, especially as buyers feel a sense of urgency with the Federal Reserve now indicating that an increase in interest rates is imminent,” said Gaye Rainey, president of the Southland Regional Association of Realtors. “The threat of higher rates, especially after a prolonged period of low rates, always convinces some prospective buyers to get moving.”
Recent increases in pending sales reflect not only the typically busy summer months for home buying, but also the likely rise in interest rates. Realtors reported a total of 825 pending home and condo sales throughout the San Fernando Valley at the end of May. That was up 6.2 percent over a year ago for the sixth consecutive year-to-year increase in monthly pending sales and the third consecutive month above the benchmark 800-pending sale total.
“There are many dynamic forces currently in work within the San Fernando Valley and state home resale market,” said Jim Link, the Association’s chief executive officer. “There’s an assessment that this is the new normal, which is reflected in that home prices continue to rise, but at a more sustainable pace. The double-digits leaps of recent years now are modest single-digit gains.”
The median price of single-family homes sold during May came in at $565,000, up 8.7 percent over a year ago and 1.8 percent ahead of this April, the Association reported. It was the highest monthly median home price since October 2007. This May’s median price was 13.7 percent below the record high of $655,000 set in June 2007.
The condominium median price of $343,000 was up 5.5 percent from 12 months ago, but off 2.0 percent from this April when the median hit $350,000 for the first time since January 2008.
The Association reported 1,571 active listings on its Multiple Listing Service, down 6.5 percent from a year ago.
At the current pace of sales, that represents a 2.2-month supply, well short of the desired 6-month inventory. After rising for 19 consecutive months from July 2013 through January 2014, heavy demand for homes has yielded a drop in the inventory every month since February.
Distressed sales continued to decline during May with foreclosure-related sales and short payoffs accounted for 7.9 percent of the total. Traditional standard sales held a 90.9 percent share, REOs 3.2 percent, and short sales 4.7 percent, with the latter being the lowest short sale share since the Association started keeping the statistics.
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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