First-time buyers taking advantage of the most favorable conditions in years continued to push home sales up in the San Fernando Valley with the May tally marking the eleventh consecutive month of sales gains, the Southland Regional Association of Realtors reported on Tuesday, June 23.
A total of 708 single-family homes changed owners during May, an increase of 5.8 percent over a year ago and 2.5 percent ahead of the April figures.
"Realtors simply do not have enough properties to sell and most sales now have multiple bidders," said Ana Maria Colon, president of the Association. "Personally, I could have sold six more homes last month, but there were no properties on the market that fit the needs of my buyers.
"I'm hearing the same story from Realtors throughout the region," Colon said.
The Association also reported that 226 condominiums changed owners last month, an increase of 34.5 percent over a year ago and 7.6 percent ahead of the April total. May marked the ninth consecutive month that condo sales have come in higher than the prior year.
"We're guardedly optimistic that the worst of the downturn is over and that prices are starting to stabilize," said Jim Link, the Association's chief executive officer.
"Current conditions have created a unique window of opportunity for first-time buyers, many of whom could not afford to buy just two years ago," Link said. "However, that window is getting much smaller due to recent upticks in interest rates, growing competition and the limited supply of homes for sale."
There were 3,625 homes and condos listed for sale throughout the San Fernando Valley at the end of May, a decrease of 48.8 percent from a year ago.
At the current pace of sales, that represents a mere 3.8-month supply compared to the 8.5-month supply of May 2008. Experts believe that a five- to six-month inventory indicates a balanced market.
Both Link and Colon noted that most of the recent sales involved bank-owned properties that had been foreclosed or were the subject of short sales. Additional properties are expected to come onto the market in coming months as the state's moratorium on foreclosures comes to an end. Realtors hope that lenders release them in small, manageable increments that the market can readily absorb.
In the meantime, prices throughout the Valley continue to reflect the limited inventory and heavy activity that is concentrated in the lower price ranges.
The median price of homes sold during May was $350,000, down 22.2 percent from a year ago. The condominium median price of $185,000 was off 38.1 percent from May 2008.
"The recovery will not be fully underway until there are robust sales in the mid- to upper-price ranges," Link said. "To have that happen, prices need to stabilize and lenders need to feel comfortable enough to begin writing more loans above $400,000."
Pending escrows – a measure of future resale activity – suggest that the market will stay active through the typically busy summer months. There were 1,335 open escrows at the end of May, an increase of 19.0 percent from a year ago. The Southland Regional Association of Realtors® is a local trade association with more than 10,000 members serving the San Fernando and Santa Clarita valleys. SRAR is one of the largest local associations in the nation.