The median price of homes sold during April rose to the highest level since 2007 while sales came in below year-ago totals due to a myriad of factors, including a lack of inventory and rising affordability issues, the Southland Regional Association of Realtors reported on Tuesday, May 24.
The median price of single-family homes rose to $610,000 last month, up 9.9 percent over a year ago and 2.9 percent higher than this March. It beat the $600,000 median posted in July 2015, yet was 6.9 percent below the record high of $655,000 set in June 2007.
The condominium median price of $359,000 was up 2.6 percent over March 2015, yet came in 6.0 percent below this March’s median of $382,000, which was the highest monthly median price since September 2007. The April condo median was 13.5 percent below the record high of $415,000 set in February 2006.
“As children left the nest and homeowners aged they used to trade down to a smaller house, but today many owners are not moving, which contributes to the tight inventory,” said Gina Uzunyan, president of the Southland Regional Association of Realtors. “Plus, decades of under-building and a sluggish economy contribute to a lack of inventory.”
Additionally, the impact of property taxes on a replacement home purchase and potential capital gains tax implications from a sale tend to further dampen the overall market, she said.
Realtors helped close escrow on 514 single-family homes this April, down 5.3 percent from a year ago, yet up 9.4 percent on a month-to-month basis. The increase from March follows typical seasonal hikes, though this April was the lowest tally for the month since 2012.
Similarly, escrows closed on 165 condominium sales throughout the San Fernando Valley during April, down 8.8 percent from the year ago tally and 12.7 percent below this March.
“What’s happening here in the Valley mirrors experiences in many parts of California,” said Jim Link, the Association’s chief executive officer. “It does not mean it’s a bad market. It’s just the new reality, with fewer choices and higher prices making it more difficult to purchase a home.”
Today’s buyers tend to need a more significant downpayment and need to be able to decide very quickly to snag a home, Link said, noting that while quick sales and multiple offers are common, reports from Realtors in the field suggest that as prices rise higher fewer buyers can compete.
There were 1,434 active listings at the end of April. Those were down 7.1 percent from a year ago and represent a 2.1-month inventory at the current pace of sales. The 1,434 listings were a far cry from the listings high of 7,730 of October 2007, the high point of the housing boom of last decade, or the all-time record high of 14,976 set in July 1992 during a down market.
Pending escrows, a measure of future resale activity, came in 7.6 percent below a year ago April with 800 open escrows throughout the Valley.
Distressed sales have virtually vanished, which also plays a role in the limited inventory.
There were only 14 foreclosure-related REOs, last month, representing 2.1 percent of the combined home and condo market. That was one-tenth of one percent above the record low. Short sales held a 2.9 percent market share with 20 transactions, while standard sales, involving traditional buyers and sellers, captures 94.6 percent of the April re-sale activity, the Association reported.
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.
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