The median price of condominiums that closed escrow during March throughout the San Fernando Valley rose to a record $433,000 while sales of homes and condos fell from year ago levels due to a lack of inventory, the Southland Regional Association of REALTORS® reported on Thursday, April 26.
The condo median price was up 9.6 percent from a year ago, surpassing the prior record of $430,000 reported in December.
The median price of homes that changed owners in March came in at $680,000, up 1.3 percent from March 2017, yet off 2.9 percent from February, which saw the single-family record high median of $700,000.
“Properly-priced homes or condos, especially in the lower price ranges, typically see offers from multiple buyers and a sale price pushed higher due to intense competition,” said Gary Washburn, president of the 10,300-member Southland Regional Association of REALTORS®. “No doubt, high prices benefits sellers, but rising prices shrinks the pool of prospective buyers, which translates into smaller and smaller price hikes for homes and, eventually, condominiums.
“Sellers benefit from the run-up in prices,” Washburn said, “but it’s getting more and more difficult to be a buyer.”
Indeed, with pushback growing from buyers, price increases have slowed, falling from double-digit gains to today’s single-digit hikes, with a further slowdown in price gains likely in the coming months.
A total of 458 single-family homes closed escrow in March. That was down 4.2 percent from a year ago, though up 48.2 percent from February due to seasonal factors. Similarly, condo sales of 167 units fell 8.7 percent from a year ago and increased 33.6 percent from February.
After setting a record low of 819 home and condo active listings in December, the inventory reported by SRAR has increased slightly, a gain that happens each year as the peak homebuying months approach. Yet the 1,049 home and condo active listings reported at the end of March nonetheless were down 10.0 percent from a year ago and remained well below historical averages.
“For decades a 6-month supply of homes for sales was typical,” said Tim Johnson, the Association’s chief executive officer, “but beginning in 2009 a 4-month supply was common and from 2012 to 2016 it fell to a 2-month supply. Last year the average monthly active inventory was a 1.8-month supply, while the first three months of 2018 suggest inventory will stay in that range or could go even lower.
“At what point will today’s record prices and high demand tempt more owners to jump into the market?” Johnson asked. “So far, the local market does not have an answer to that question.”
For perspective, the record-high inventory for any month was 14,976 in July 1992. Last decade, the high came in October 2007 with 7,730 active listings, which was a 16-month supply at the then current pace of sales—just as the bottom fell out of the housing market and the economy went into free fall.
Pending escrows—a measure of future sales—came in 16.7 percent below a year ago with 714 open escrows reported at the end of March.
Despite high demand, 11 homes and condominiums were foreclosure related transactions, representing a 1.8 percent share of the local market in March. REALTORS® also helped close an additional five so-called short sales, where a lender agrees to a purchase price lower than the outstanding balance on an existing home loan.
Fully 96.2 percent of all transactions consummated in March were standards sales involving traditional homebuyers and homesellers.
The Southland Regional Association of REALTORS® is a local trade association with more than 10,300 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
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