A tight inventory of homes and condominiums listed for sale — hitting to the lowest monthly tally since 2013 — limited sales throughout the San Fernando Valley during February, the Southland Regional Association of REALTORS® reported on Wednesday, March 22.
The 321 single-family homes that closed escrow last month were essentially unchanged from a year ago, down one sale or 0.3 percent.
“The tight inventory has made this market so frustrating for buyers,” said Nancy Starczyk, president of the 9,600-member Association. “We don’t know when this cycle will end, though spring typically brings out more homebuyers, so we’re hopeful additional owners will list their property to capture favorable prices.”
Starczyk said REALTORS® throughout the San Fernando Valley reported strong consumer confidence along with multiple offers on homes that are priced right.
“For many properties, it’s red hot out there,” she said, noting that she is eager to see the impact on the local market of the Federal Reserve’s recent hike by a quarter percentage point in its benchmark short-term rate along with its forecast for two more hikes this year and an additional three rate boosts in 2018.
“We continue to hear about strong consumer confidence,” Starczyk said, “and the Fed’s action appears to feed faith in the economy, which may prompt additional owners to list their property.”
In addition to the 321 homes that closed escrows during February, local REALTORS® also assisted the sale of 147 condominium sales. That was up 8.9 percent from a year ago and 8.1 percent ahead of this January.
High prices and tight inventory kept home and condo sales 75.7 percent and 71.9 percent below their respective record highs of 1,321 home sales in December 2011 and 524 condo sales in July 2004.
“February sales numbers highlight the realities of a low inventory market and affordability constraints,” said Tim Johnson, chief executive officer of the Southland Regional Association of REALTORS®. “Rising interest rates typically push more buyers off the fence, but finding an affordable home will remain a challenge.”
The median price of homes sold during February of $600,000 was up 7.0 percent from a year ago while the condominium median price of $399,000 increased 5.0 percent. Both appear to have hit a plateau, posting modest year-to-year increases, but staying below record highs.
The record high single-family median price of $655,000 was set in June 2007 while the condo high of $415,000 was established in February 2006. The medians reported this February were 8.4 percent and 3.9 percent, respectively, below those high water marks.
The Association also reported 1,102 active listings of all types of property at the end of February throughout the San Fernando Valley. That was down 15.2 percent from a year ago and represented a 2.4-month supply at the current pace of sales.
The February active listing total was the lowest of any month since March 2013. For comparison, the record high active listing tally of 14,976 was set in July 1992 as the national economy was in recession. Inventory averaged 3,100 listings per month during the boom market of the early 2000s, before rising to 7,730 active listings in October 2007 as the housing bust swept the nation.
Pending sales, a measure of future sales activity, stood at 667 at the end of February, up 2.9 percent from a year ago.
Of the total 468 homes and condos that closed escrows, 444 or 94.9 percent, were standard sales involving traditional buyers and sellers. Eleven were foreclosure related, for 2.4 percent of the total, and nine were short payoffs, or 1.9 percent, where a lender agrees to a sale price lower than the outstanding balance of an existing loan.
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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