The median price of condominiums sold during June rose to a record high while home and condominiums sales slumped throughout the San Fernando Valley, the Southland Regional Association of REALTORS® reported Monday, July 23.
A total of 571 homes changed owners during June, down 3.9 percent from June 2017. Following seasonal patterns, the total was up 14.9 percent from this May.
REALTORS® also helped close escrow on 188 condominiums transactions. That was down 26.8 percent from a year ago and unchanged from May.
“May and June sales took a hit in part because of the hike in mid-April of interest rates jumping to the highest level since 2014,” said Gary Washburn, president of the 10,300-member Southland Regional Association of REALTORS®, which serves the San Fernando and Santa Clarita valleys.
“No doubt higher rates and rising prices create affordability issues for many prospective buyers, and that hinders sales,” he said. “Yet the true culprit is the lack of inventory. Even with modest increases in active listings, there’s still no where near enough properties available to meet demand.”
The association reported 1,368 active listings at the end of June. That was the highest number so far this year, a 2.5 percent improvement over June 2017, and the second consecutive monthly increase after 39 months of consecutive year-to-year declines.
That’s good news, though the total of homes and condominiums listed for sale still represented a mere 1.8-month supply at the current pace of sales. A market the size of the San Fernando Valley ideally would have a five- to six-month supply.
“Even a modest increase in inventory is welcome,” said Tim Johnson, the Association’s chief executive officer. “Yet, so long as inventory stays tight, we’ll see upward pressure on resale prices.
“With two additional hikes in interest rates expected later this year affordability will become even more of an issue,” he said. “Buyers refusing to pay increased prices may prompt home sellers to limit price hikes, which could offset some of the upward pressure created by a limited supply.”
The median price of homes that closed escrow during June came in at $691,000, up 8.0 percent from a year ago. The median was down 2.4 percent from the $708,000 record high median set in May.
The condominium median price hit a record of $438,000. That was up 4.3 percent from June 2017 and 4.3 percent higher than this May. It beat the prior record of $435,000 reported in April.
Pending escrows — a measure of future market activity — were 9.2 percent lower than a year ago with 728 combined residential open escrows reported at the end of June.
There were seven foreclosure-related sales during June, representing a 0.9 percent share of the local residential real estate market. Plus, five short sales, for a 0.7 percent market share. Of the 759 home and condominium sales concluded in June, 97.1 percent were standard sales involving traditional buyers and sellers.
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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