Low interest rates on home loans combined with some sellers willing to negotiate their asking price kept home sales chugging along during May, though still below year ago levels, the Southland Regional Association of Realtors reported on Thursday, June 20.
A total of 489 single-family homes changed owners last month, off 1.6 percent from May 2018, while 176 condominiums closed escrow, down 6.4 percent from the prior year.
“No doubt low interest rates are bringing buyers out and are having an impact on the local residential housing market,” said Dan Tresierras, president of the Southland Regional Association of Realtors. “Rates are at the lowest level in 18 months and look like they may be headed even lower.
“The impact is direct,” he said, “low rates make housing more affordable.”
The median price of homes sold during May came in at $686,000, down 3.2 percent from a year ago. Similarly, the 176 condo sales had a median price — meaning half were priced higher and half lower — of $417,000. That was off 0.7 percent compared to May 2018.
The home median price was 3.2 percent below the record high of $708,000 set in May and August 2018. And the condominium median was off 7.1 percent from the record high of $449,000 set in July and August.
“Resale prices have been bouncing around below record highs,” said Tim Johnson, the Association’s chief executive officer. “Low rates brought more buyers out, which kept some upward pressure on prices, yet sellers do not have much room for further price hikes as the pool of buyers continues to shrink and affordability becomes a limiting issue.”
At the end of May there were 1,306 homes and condominiums for sale throughout the San Fernando Valley.
That was up a mere 0.2 percent from a year ago and represented a meager 2.0-month supply at the current pace of sales. Historically, a 5-month supply was needed for a balanced market where neither sellers nor buyers had a clear advantage.
Pending escrows, a measure of future closed escrow activity, total 750, down 4.1 percent from a year ago May when there were 782 pending escrows.
Of the 665 home and condo sales completed last month, 639 or 96.1 percent of the total, were standard sales involving traditional buyers and sellers. Five single-family homes or 0.8 percent changed owners as a result of a foreclosure. Another five transfers — three homes and two condominiums — were short sales where the lender agrees to a purchase price lower than the outstanding loan on the property.
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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