The median price of single-family homes sold during July throughout the San Fernando Valley exceeded the $600,000 benchmark for the fourth consecutive month with the $623,000 median price the highest since September 2007, the Southland Regional Association of Realtors reported on Thursday, Aug. 25.
“Home prices inch ever closer to the record highs of last decade, yet the pace of price increases is slowing and the pool of buyers who can afford to buy is shrinking,” said Gina Uzunyan, president of the Association.
Years of pent-up demand, today’s remarkably low interest rates on home loans, and a very limited inventory of homes listed for sale all keep upward pressure on prices, Uzunyan noted.
The July median price of $623,000 increased 3.8 percent from a year ago and has been on a virtually unbroken upward trajectory since hitting the record low of $339,000 in December 2011.
Despite dramatic differences in the today’s market compared to the boom of the 2000s, the July median price was a mere 4.9 percent below the record high of $655,000 established in June 2007.
Similarly, the condominium median price of $397,000 was up 13.4 percent over a year ago. It was the highest since July 2007, a mere 4.3 percent lower than the record high $415,000 set in February 2006.
“Not surprisingly,” said Jim Link, the Association’s chief executive officer, “rising prices combined with limited supply and falling affordability translate into fewer sales.
“We’re hearing that prices have gotten to the point where buyers are hesitant go higher than list price,” Link said. “There’s more negotiating going on and more sales coming in under list price and we’re not seeing as many sales at full price, especially since the number of all-cash buyers has receded.”
Realtors assisted a total of 542 closed escrows throughout the San Fernando Valley during July. That was down 10.1 percent from a year ago and surprisingly down 11.4 percent from June because July typically is one of the busiest months of every year.
Realtors also helped close escrow on 179 condominium sales during July. That figure was off 10.5 percent from July 2015 and 11.4 percent below this June, which posted the most condo sales so far this year.
Pending sales — a measure of future sales activity — have been strong throughout Southern California, but the San Fernando Valley appears to be running counter to that trend. There were 728 open escrows in the Valley at the end of July, down 15.1 percent from a year ago.
The number of properties listed for sale at the end of July was the highest so far this year yet nonetheless down 7.3 percent form a year ago and well short of what would be needed to satisfy current demand. The 1,720 active listings represented a 2.4-month supply at the current pace of sales. For perspective, when the housing market crashed in 2007, inventory averaged a 9.2-month supply. Since 2012, local inventory has stayed at or below a 2-month supply with only five months at or higher than a 3.0-month backlog.
Of the 721 total residential transactions reported last month, 96.9 percent were traditional sales. Seven transactions, or 1.0 percent of the total, were foreclosure related, while nine were short payoffs or 1.2 percent of the total.
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.