Single-family home sales broke through the 500-sale benchmark for the first time this year while condo sales increased 1.1 percent from a year ago as low interest rates prompted buyers to jump into the market during August, the Southland Regional Association of REALTORS® reported on Friday, Sept. 20.
The rush for affordable properties pushed the median price of the 190 condominiums that changed owners last month to $455,000, which tied the record high set this June. That was up 1.3 percent from a year ago.
“Resale prices remain high, hovering at or just below record levels,” said Dan Tresierras, president of the 10,300-member Southland Regional Association of REALTORS®. “Yet a low interest rate lowers the cost of borrowing for homebuyers and, in some instances, means less income is needed to buy than a year ago.”
The median price of single-family homes that changed owners last month was $728,000, up 2.8 percent from August 2018 yet down 1.0 percent from the record high $735,000 reported in July.
REALTORS® assisted 520 single-family home sales during August, off 1.5 percent from a year ago. It was the first time this year that the sales total came in above the 500-sale mark.
Condominium sales of 190 units were 1.1 percent ahead of 12 months ago and up 22.6 percent from July.
“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, giving them added buying power, but also support today’s high prices, which make housing unaffordable to large numbers of prospective buyers while keeping inventory low.”
With only one exception, the inventory of properties listed for sale had improved every month since May 2018, following more than three years of consistent monthly declines.
However, beginning this June, the supply started falling again, tumbling from 1,352 active listings in June to the August total of 1,286. At the current pace of sales that represents a 1.8-month supply — well short of what is needed to meet demand.
Pending escrows, a measure of future sales activity, came in with 727 home and condominium open escrows at the end of August, which was up 7.2 percent from a year ago.
SRAR’s “Income-to-Loan Guide” for August showed that the minimum income needed to qualify for a loan on the San Fernando Valley’s median-priced home during August of $728,000 was $145,731.
That income minimum was down 5.5 percent from a year ago — largely because of lower interest rates.
In recent weeks rates have jumped higher in reaction to economic and international events, though most experts believe low rates will return at some point this year.
The Association’s Income-to-Loan Guide found that an 80 percent loan, assuming a 20 percent downpayment, of $582,400 was available during August at a national average of 3.62 percent, according to Freddie Mac.
That yields a monthly payment of $2,654 for interest and principal, $758 for property taxes, and $231 for home insurance, with total housing costs per month coming in at $3,643.
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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