Realtors helped close escrow on 253 single-family home sales during June and an additional 110 condominiums, the Southland Regional Association of Realtors reported on Thursday, July 23.
The home sale tally was up 33.2 percent over a year ago and 26.5 percent ahead of this May. It was the highest monthly sales total since October 2005 when 280 homes changed owners. Sales have risen 155.6 percent from the recession low, yet remain 37.5 percent below the boom high of 405 sales set in June 2005.
Similarly, condominium sales were up 13.4 percent over June 2014. It was the highest monthly total since August 2013 and the second time since last October that condo sales have exceeded the 100-sale benchmark.
“June, July and August typically are the busiest months of the year for home sales,” said Bob Khalsa, president of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. “The strong activity was expected and will continue for the months ahead, especially given heavy pent-up demand from buyers, many of whom want to buy before interest rates on home loans increase.
“It’s not a question of if interest rates will rise, but when,” Khalsa said, noting that the Federal Reserve has indicated it most likely will hike rates later this year.
Given the heavy demand, which triggers multiple offers on properly priced properties, the increase in the median price was moderate, said Jim Link, the Association’s chief executive officer.
“Buyers understand that it’s best to buy today knowing that prices continue to rise, even though price hikes are in the single-digit range after months of double-digit hikes,” Link said. “Purchasing now enables buyers to build equity as prices appreciate further, while low interest rates lets them buy more home for their money. Yet price hikes have been tempered as we come closer to affordability limits; there’s a price point beyond which buyers simply cannot go.”
The median price of the 253 homes sold last month came in at $521,000, up 8.3 percent over June 2014, yet fell 1.7 percent from the May median of $530,000, which was the highest since October 2007. June marked the fourth consecutive month that the median exceeded $500,000.
The condominium median price of $315,000 was up 8.6 percent over a year ago June. It was the third time the condo median came in at $315,000—January, May and June—which is the highest median price since December 2007.
Khalsa noted that inventory remains tight partly because investors who purchased distressed properties are reluctant to sell while properties continue to appreciate and they can demand high rents. He expected an increase in supply over the coming years as sizeable amount of new home construction becomes available, which typically prompts existing owners to trade for a newer property.
The Association reported 688 active listings throughout Santa Clarita at the end of June, down 2.5 percent from a year ago. At the current pace of sales that represents a 1.9-month supply, well short of the desired 6-month inventory needed to foster a balanced market.
June ended with 397 pending escrows—a measure of future sales. That figure was up 24.8 percent over a year ago, which means sales activity will remain strong over the coming months.
Distress sales continued to decline, although up slightly from this May to a combined 6.4 percent share of total sales. Foreclosure-related sales held a 1.4 percent share of the market, short sales—where lenders agree to a sale price less than the outstanding loan balance—came in at 5.0 percent, and standard sales held a 92.3 percent market share.
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.