The price of single-family homes sold throughout the San Fernando Valley during 2016 came in at $599,733, just short of the record high set in 2006, while home sales fell 4.0 percent, the Southland Regional Association of Realtors reported on Thursday, Jan. 19.
The annual median home price increased 8.2 percent over 2015 and was 2.0 percent below the record high annual home price of $611,933 established in 2007, the Association reported. Local resale prices have been rising steadily since 2011 with four of the past five years posting single-digit gains along with a double-digit leap of 24.1 percent in 2013.
The condominium annual price also posted its fifth consecutive annual increase with 2016 up 6.3 percent to $373,208. That was 5.5 percent below the record high condominium annual price of $394,917, which was set in 2006.
Home and condominium transactions during 2016 generated $5.4 billion for the local economy, not including the added millions of dollars real estate sales trigger in items ranging from purchases of appliances and furniture to home renovations and new landscaping.
“I’m very optimistic,” said Nancy Starczyk, the 2017 president of the 9,600-member Southland Regional Association of Realtors. “I expect to see gradual growth and continuing strong demand for housing in the coming months.
“Nothing particularly robust will happen relating to housing until we see which direction the new administration in Washington, D.C. is headed,” Starczyk said, noting that Los Angeles is in the midst of a housing shortage that leaves renters few affordable choices while rising home prices in the midst of low inventory make it a challenge to find a home to purchase, qualify for a loan, and successfully close an escrow.
A total of 5,863 single-family homes changed owners during 2016 in the San Fernando Valley. That was off 4.0 percent from the prior year and was the second lowest annual home sales total, behind the 5,643 sales of 2014.
Fewer than 10,000 homes have changed owners in every year since 2006 following a 10-year run with sales above the 10,000-sale benchmark, peaking at 13,878 in 2003, just before the economy plunged into the Great Recession. For perspective, the record high single-family home annual sales tally was set in 1988 at 15,263.
“The lack of inventory and shrinking affordability are huge issues for all of California which are magnified here in the San Fernando Valley,” said Tim Johnson, the Association’s chief executive officer. “There are so many variables that make prediction risky, yet our statistics show the pace of price increases slowing down. But something needs to be done if we want to ensure that essential service providers like police, fire and first responders, have an affordable place to live.
“The solutions will come through a combination of local and statewide housing initiatives and reforms,” Johnson said. “And, the wild card is the new administration’s plans for federal housing policy.”
Local Realtors also assisted in the sale of 2,140 condominiums during 2016. That was down 0.6 percent from a year ago and was the second lowest annual tally since 1995 behind the 1,983 sales of 2014. Annual condo sales figures have trended down since 2002 when the record high annual condo sales total of 5,041 was reported. Condo sales since the Great Recession have been stuck in the mid- to low-2,000 range.
The lack of inventory kept home and condo sales in check throughout 2016, despite strong demand. The annual average monthly inventory last year was 1,611 active listing — which translates to a 2.2-month supply at the then current pace of sales, which appears to be the new normal for inventory.
For perspective, the highest inventory following the Great Recession was 7,730 active listings in October 2007, which was a 16.0-month supply. And, the record high inventory of 14,976 active listings was reported in July 1992 — a 17.6-month supply.
The year ended with December home sales up less than one percent from the prior year and condominium sales down 1.1 percent. The 496 homes that changed owners during December had a median price of $575,000, up 1.8 percent from December 2015. The median price of the 181 condos that closed escrow during December was $380,000, which was unchanged from a year ago.
There were a mere 1,150 active listings throughout the San Fernando Valley at the end of December. That was down 4.7 percent from the prior year and represented a 1.7-month supply.
The Southland Regional Association of Realtors® is a local trade association with more than 9,600 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
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