The home resale market during August in the San Fernando Valley stayed busy yet also reflected a seasonal tapering of activity and the realities of a market with too few properties listed for sale, the Southland Regional Association of Realtors reported on Monday, Sept. 28.
Realtors closed escrow on 577 single-family homes throughout the Valley. That was up 20.7 percent over a year ago, while 4.3 percent below the July total of 603 sales, which was the highest total in 27 months.
With even fewer properties for sale, the condominium market ended August with 188 condos changing owners, up 1.1 percent from August 2014, yet off 6.0 percent from this July. It was the first month that sales fell below 200 following two consecutive months above that standard.
“While there are fewer multiple offers and buyers are less likely to bid above list price, there are still too many buyers chasing a very limited inventory,” said Gaye Rainey, president of the Southland Regional Association of Realtors. “That’s pushing prices higher. Yet with each price hike, affordability looms larger.”
There were 1,859 active listing on the Multiple Listing Service operated by the Association. That was down 2.7 percent from a year ago and represented a 2.4-month supply at the current pace of sales. A year ago the Association reported a 2.9-month supply for a market that ideally needs a 6-month inventory to balance the market.
Tight inventory means higher competition and typically yields higher purchase offers. The median price of homes sold last month came in at $580,000, up 6.8 percent from August 2014, yet down from the $600,000 median price of July, which was the highest median price since September 2007.
Reflecting stiff completion for entry-level priced properties, the condominium median price shot up to $370,000, the highest median since November 2007. The condo median was up 11.8 percent over a year ago and 5.7 percent higher than this July.
“We’re still 10 percent to 11 percent below the peak prices seen during last decade’s boom and bust housing cycle,” said Jim Link, the Association’s chief executive officer. “Unlike a decade ago, today’s prices are running up in response to limited supply and strong demand. Plus, there are different forces at play in today’s housing market, with people staying longer in homes, refinancing and remodeling, and a fundamental shift in consumers’ view of housing.”
The era of buying and staying put for three to five years then trading up appears to have vanished, Link said.
Even with seasonal slowdowns, the local market is poised to remain busy through the coming months. There were 884 open escrows—a measure of future sales—at the end of August. That was up 23.5 percent over a year ago.
Distressed sales continued to drop off the radar. The 14 foreclosure-related sales reported during August were 1.8 percent of the total combined resale market: A year ago they represented a 3.2 percent market share. This August’s short sale total of 23 transaction held a 3.0 percent market share compared to last year’s 5.1 percent share.
Standard sales continued to gain ground. Of the total 765 home and condo closed escrows reported by the Association, 720 were standard sales, for a 94.1 percent market share, up from the August 2014 share of 90.7 percent.
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.