Despite the limitations of a tight inventory, sales and the median price of existing homes sold in the San Fernando Valley during October posted increases over year ago numbers, the Southland Regional Association of REALTORS® reported on Tuesday, Nov. 22.
A total of 506 single-family homes changed owners during October. That was up 4.3 percent from a year ago and, following seasonal patterns, down 6.6 percent from September. With pending escrows up 8.1 percent, there’s a chance 2017 home sales will equal or slightly surpass 2016.
Realtors also assisted 193 condominium transactions last month, down 3.5 percent from October 2016 and off 1.0 percent from September. Condo sales were poised to post an increase from 2016 totals, yet sales over the last several months have lagged, due to the inventory limitations along with rising resale prices.
“I’m concerned that today’s tight inventory will go even lower if the current version of tax reform is passed and signed into law,” said Nancy Starczyk, president of the Southland Regional Association of REALTORS®. “Extending the capital gains exclusion qualification period from two years to five years, as proposed, could lock up badly needed inventory.
“It’s too soon to even guess where housing is headed in 2018, yet none of what’s being put forward in Washington, D.C., bodes well for California housing,” she said. “I worry that people will be sitting on the fence, uncertain which way to go until we all understand the ramifications of these suggested changes.”
The inventory of 1,246 active listings reported at the end of October was down 21.5 percent from 2016. At the current pace of sales that represents a 1.8-month supply; a year ago it was a 2.3-month supply. Over the last six years, beginning in 2012, the average annual inventory was 2.2 months — a fraction of the 31-year annual average of a 6.3-month supply.
October continued the pattern that began in February 2015 with every consecutive month posting a decline from the prior year in the inventory. However, since this February the monthly declines have been in the double-digit range.
“The shortage of property for sale is bad news all around, yet especially for entry-level buyers,” said Tim Johnson, the Association’s chief executive officer. “That’s where the inventory is the tightest and those are the families least able to cope with the rising prices and multiple offers triggered by the inventory shortage.”
The median price of homes sold in October was $648,000, up 3.7 percent over a year ago. After shattering the record of last decade with a new high of $671,500 this March, the median price has been bouncing around below that number, suggesting prices may have hit a plateau. At a minimum, the pace of price hikes has slowed with single-digit increases instead past double-digit hikes.
The median price of condos that changed owners last month was $415,000, up 16.9 percent over October 2016 when the median was $355,000. The condo median hit a record high of $420,000 in June with each of the last six months posting a median above $410,000.
Distressed sales have virtually vanished in this sellers’ market.
There were four single-family home foreclosure sales and zero condominium foreclosures reported during October in the San Fernando Valley. The four home foreclosures represented a 0.6 percent share of the Valley’s total 699 combined residential closed escrows. Short sales totaled 11, a 1.6 percent share of the total. Standard sales involving traditional buyers and sellers accounted for most of the activity, 673 transactions or 96.3 percent of total combined residential activity.
The Southland Regional Association of REALTORS® is a local trade association with more than 9,800 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
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