Home sales throughout the San Fernando Valley during 2015 increased 8.2 percent while the single-family home median resale price rose to $554,208, the Southland Regional Association of Realtors reported on Thursday, Jan. 14.
The 6.8 percent increase in the home annual median price marked the fourth consecutive year it was in positive territory, although the increases have been slowing since peaking with a 24.1 percent upturn in 2013.
The condominium annual median price of $351,208 also rose for the fourth consecutive year with the median price up 9.2 percent in 2015. The condo median hit bottom in 2011 at $217,367 and has been rising since then, including a 30.9 percent leap in 2013.
Realtors throughout the San Fernando Valley negotiated $5.2 billion in home and condominium sales last year, with total transactions generating additional millions of dollars in related benefits for the local economy, including items such as remodeling, landscaping, furniture, and appliance sales.
“2015 was a healthy year for local home buyers and sellers and I’m excited at the prospects for 2016,” said Gina Uzunyan, president of the 9,500-member Southland Regional Association of Realtors, which is one of the largest local trade associations in the nation. “Sales likely will increase slightly in the New Year while affordability issues may keep price appreciation in the low single-digit range.
“I spend two hours interviewing prospective buyers and many of them tell me that their rapidly rising rent is a major motivation for wanting to buy a home,” Uzunyan said. “Mix in still historically low interest rates on home loans along with pent-up demand and there are solid reasons to expect 2016 to see an increase in home sales.”
Uzunyan expected to see fewer instances in 2016 of multiple offers on properties as resale prices rise higher and experienced Realtors work with clients to properly price a property rather than using questionable marketing strategies of under- or over-pricing a listing.
A total of 6,108 home sales closed escrow in 2015, up 8.2 percent over a year ago. It was the highest annual tally since 2011. Sales peaked before the Great Recession in 2003 with 13,878 homes changing owners, although the record high was posted in 1988 when 15,263 escrows closed.
Realtors during 2015 also negotiated 2,153 condominium sales, which was up 8.6 percent over 2014. Since 2003 only three years have posted positive condo sales totals. The record high annual condo total was reported in 2002 with 5,041 sales.
“Sales and prices for 2015 ended on a high note as expected, given today’s economic realties,” said Jim Link the Association’s chief executive officer. “People are not listing homes like they did in the old days with affordability limits, fewer replacement home options, and the impact of property taxes playing key roles in decisions to stay in their current home.
“Inventory will not increase dramatically unless there is a recession, which seems unlikely at this juncture,” he said.
Inventory continues to shrink with the 1,207 active listings reported throughout the San Fernando Valley at the end of December down 13.2 percent over a year ago December. At the current pace of sales, the supply represents a 1.8-month inventory. A year ago it was a 2.0-month supply. A 6-month inventory is needed to balance market forces.
December home sales of 494 units marked an unbroken streak dating to 2005 where December sales came in higher than November, a statistic probably driven by a desire by all parties to capture tax benefits before the end of the calendar year. Compared to December 2014, however, the 494 closed escrows were off 5.4 percent. The December condominium total of 183 sales was up 5.2 percent over a year ago and 13.7 percent higher than November.
Distressed sales played a negligible role in the market last year with foreclosure-related transactions capturing 2.5 percent of the December market and short payoffs 5.0 percent. Traditional standard sales had the lion’s share at 87.0 percent of total closed escrows.
The Southland Regional Association of Realtors® is a local trade association with more than 9,500 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.