Home sales in the Santa Clarita Valley fell during May with the 196 closed escrows 10.9 percent below a year ago, the Southland Regional Association of Realtors reported on Tuesday, June 23.
It was the first time the monthly total was lower than the prior year after 13 consecutive months of sales increases.
It also was the first time in five months that the tally was lower on a month-to-month basis, but Nancy Starczyk, president of the Association's Santa Clarita Valley Division, said the decline had more to do with processing some sales than a lack of buyer demand.
"Multiple offers come in on virtually every property so there is plenty of interest on the part of prospective buyers," Starczyk said. "But there is an absolute logjam with lenders, especially regarding short sales which take much longer to process and for banks to decide.
"If more homes were on the market and if banks would just break loose to let short sales close," she said, "we will have more sales next month."
Pending escrows, a measure of future sales activity, appear to support that conclusion. The 480 open escrows at the end of May were up 41.6 percent over a year ago.
Starczyk and Jim Link, the Association's chief executive officer, agreed that the lack of inventory is also hurting sales and has generated competition for the properties the are available.
"Everyone believes that there are more foreclosed properties that banks are holding onto," Link said. "If lenders release them in a systematic way there is enough buyer activity to absorb them without killing the recovery."
Realtors are "guardedly optimistic," Link said, that the housing recovery will continue through the coming months, although a robust recovery will not occur until sales that now are clustered in lower price ranges spill over into mid- and high-end properties.
For now, however, the beneficiaries of today's market are first-time buyers who not long ago had been frozen out the market.
"Today's window of opportunity for buyers who were priced out a year or two ago is getting narrower, especially with recent slight increases in interest rates and the lack of inventory.," Link said.
There were 1,010 active listings throughout the Santa Clarita Valley at the end of May, a decline of 48.1 percent from a year ago. At the current pace of sales, that represents a mere 3.8-month supply, compared to the 6.6-month supply of May 2008. A five- to six-month supply reflects a balanced market.
Realtors also closed escrow during May on 68 condominiums, a decline of 9.3 percent over May 2008, but up 15.3 percent from this April's total.
The median price of the 196 single-family homes sold last month was down 11.1 percent from a year ago to $400,000. The condominium median of $240,000 was off 21.3 percent.
Much of the decline in the median price – which is the point where half the sales are higher and half lower – is due to the concentration of activity in entry level properties.
"Even though the median is down from a year ago," Link said, "resale prices have leveled off" with each of the last five months higher than the December median of $385,000, which was the low point of this cycle.
The Southland Regional Association of Realtors is a local trade association comprised of more than 10,000 members serving the San Fernando and Santa Clarita valleys. SRAR is one of the largest local associations in the nation.