Pushed by low interest rates, single-family home sales increased 8.7 percent during August while the median price of condominiums that changed owners tied the record high and the inventory of properties listed for sale fell for the second consecutive month, the Southland Regional Association of REALTORS® reported on Friday, Sept. 20.
The 238 home that closed escrow last month fell 9.5 percent from the July total of 263 sales, which was the year’s best monthly tally and the highest since June 2018.
REALTORS® also assisted 101 condominium sales —down 12.9 percent from a year ago, but up 24.7 percent from July.
“There’s plenty of demand for housing in Santa Clarita driven in part by low interest rates and limited by inadequate supply,” said Amanda Etcheverry, the 2019 chair of the Santa Clarita Valley Division of SRAR. “Some buyers are cautious, but others understand that a low interest rate gives them powerful, added buying power.”
After four months above the 600-listing benchmark, properties listed for sale fell 22.6 percent during August to 541 active listings, the Association reported. It was the second consecutive month that listings fell following 13 consecutive monthly increases.
At the current pace of sales, the inventory represents a 1.6-month supply, a level not seen since June 2018 and woefully inadequate to meet demand.
“Lower interest rates on home loans are a double-edged sword,” said Tim Johnson, the Association’s chief executive officer. “They help lower the cost of a home loan for buyers, but also support today’s high prices, which makes housing unaffordable to large numbers of prospective buyers while keeping inventory low.”
The median price of homes that changed owners last month came in at $605,000, which was unchanged from a year ago yet off 4.0 percent from this July.
Unlike most other Southern California communities, Santa Clarita has not seen the home median price surpass the record set during the boom of last decade. The record high of $643,000 came in April 2006.
However, the condominium record median price of $420,000 reported this August, which was up 5.3 percent from a year ago, broke the prior high of $415,000 reported in June. Four of the last five months have seen a condo median above the $400,000 benchmark. The highest price reported last decade was $397,000 in January 2006.
Pending escrows, a measure of future sales activity, totaled 317 open escrows, which was up 7.5 percent from a year ago.
While prices have hovered at or just below record levels, the Association’s “Income-to-Loan Guide” reflected the impact of lower interest rates.
The guide showed that an income of $121,109 was needed to qualify for an 80 percent loan on the Santa Clarita median-priced home of $605,000 — which was down 8.1 percent from a year ago.
At the national average interest rate of 3.62 percent, a buyer would have a total monthly PITI — principal and interest, plus property taxes and insurance — of $3,028 on a $484,000 loan. That breaks down to $2,206 for the mortgage, $630 for taxes, and $192 for insurance.
Three of the last four months have seen less income than the prior year needed to buy a local, median-priced home.
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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