Resale prices hovered at the highest levels since 2007 for the 130 single-family homes and 55 condominiums that changed owners during February throughout the Santa Clarita Valley, the Southland Regional Association of Realtors reported on Tuesday, March 21.
The home sales total was down 4.2 percent from a year ago—with a decline not unusual for at this time of year—while the condominium tally posted a 17.0 percent increase over February 2015.
“With the continued limited inventory, it’s likely sales and prices will move higher in the coming months,” said M. Dean Vincent, president of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. “Economists point to real estate charts and statistics which describe a 6-year cyclical pattern for the real estate market, which suggests we should have reached our peak for this phase.
“Yet so long as interest rates stay low, I believe rising sales and prices can be sustained,” Vincent said. “The difference will be that the increases will be slower, more moderate, probably a single-digit increase of 5 percent in the annual median price.”
The median price of the 136 homes that changed owners in February came in at $530,000. That was the second-consecutive month at that figure, which also was reported in May of last year. The $530,000 median home price — the point at which half the homes sold for more and half for less — was the highest since October 2007, yet it was still 17.6 percent below the record high of $643,000 set in April 2006.
The condominium median price of $335,000 rose 11.7 percent over a year ago. Similar to the single-family median price, the condo median was the highest since September 2007 but was 15.6 percent below the record high of $397,000 set in January 2006.
“The pace of increases definitely is slowing,” said Jim Link, SRAR’s chief executive officer. “Not only do we have a shrinking pool of prospective buyers who are able to pay rising prices, but price hikes and sales totals also will be kept in check by stricter lending requirements and today’s tougher appraisals, unlike what happened a decade ago.”
Additional homes listed for sale would ease pressure on prices and give buyers more options, Link noted, yet an increase in the supply is unlikely to happen anytime soon, partly because Baby Boomers today resist moving or trading down, preferring to stay in place instead.
There were 509 active home and condominium listings on the Multiple Listing Service operated by the Association at the end of February. That was down 4.3 percent over a year ago. At the current pace of sales the 509 active listings represented a 2.7-month supply compared to the 2.8-month inventory reported at the end of February 2015.
Of the 191 total home and condominium sales facilitated by Realtors last month, 90.6 percent were standards sales involving traditional buyers and sellers.
Additionally, 3.7 percent of the combined totals were foreclosure related and 4.2 percent were short sales, where lenders agreed to a sale at a price lower than the outstanding loan.
Interestingly, February marked the second consecutive month since the Association started keeping the statistic in 2012 that there were zero condominium foreclosure-related Real Estate Owned transactions. February also was the first month with zero condominium short sales.
“It’s positive seeing some housing categories with zero distressed sales,” Vincent said. “A benefit of rising resale prices is that there are fewer underwater owners, those who owe more than their home’s current resale value, and growing legions of owners have equity in their home, reducing, if not completely eliminating, the likelihood of a distressed sale.”
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.