The inventory of homes listed for sale fell for the sixth consecutive month during November as buyers pursuing low interest rates pushed home and condominium sales higher, the Southland Regional Association of REALTORS® reported Tuesday, Dec. 17.
A total of 423 single-family homes throughout the San Fernando Valley changed owners last month for a 2.2 percent increase in sales compared to a year ago. Following seasonal trends, the home sales total was down 8.4 percent from this October.
Similarly, REALTORS® assisted 149 condominium sales — 12.0 percent higher than November 2018, but off 10.8 percent from October.
“Today’s buyers understand that low interest rates — in fact, the lowest in three years — can offset some of the borrowing costs for buyers,” said Dan Tresierras, president of the 10,300-member Southland Regional Association of REALTORS®.“Plus, new FHA condominium loan approval policies that took effect Oct. 15 may have helped additional buyers.”
The new condo policies made multiple changed, but the most notable was to allow certain individual condominium units to be eligible for FHA mortgage insurance even if the condo project is not FHA approved.
“As has been the case all year long,” Tresierras said, “the primary brake on sales during November was the exceedingly thin inventory of homes listed for sale.”
There were 974 properties listed for sale throughout the San Fernando Valley at the end of November, which was down 35.5 percent from a year ago, the sixth consecutive monthly decline, and marked the first time in 21 months that the inventory fell below the 1,000-listings benchmark.
For perspective, the record low listing total of 819 listings was set in December 2017 which followed three years of consecutive monthly declines. The record high listing total of 14,976 came in July 1992, which represented a 17.6-month supply at the then current pace of sales. This November’s 974 listings translated to a 1.7-month supply at the current pace of sales
“Low interest rates help offset some of the impact of rising prices,” said Tim Johnson, the Association’s chief executive officer. “But REALTORS® believe more homes and rental units must be built or the affordability crisis will only worsen with each passing year.”
The median price of single-family homes that closed escrow during November came in at $739,000. That was up 12.0 percent from a year ago, yet down 2.1 percent from the $755,000 median reported in October, which was a record high.
The median smashed through the $700,000 benchmark in June and has stayed there ever since.
The condominium median price of $450,000 was up 5.5 percent from November 2018. The record high condominium median price of $455,000 was set in June and again in August.
Fueled by low interest rates, pending sales — a measure of future sales activity —totaled 526 open escrows. That was up 2.3 percent from a year ago.
The Association’s “Income-to-Loan Guide” found that an income of $149,000 was needed to qualify for an 80 percent loan on the median-priced Valley home at $739,000. That was down 0.1 percent from a year ago and yielded a monthly payment of $2,721 for principal and interest, and the monthly share of insurance and property tax.
A median-priced condo of $450,000 had a minimum income requirement on an 80 percent loan of $90,731, which was down 5.8 percent from November 2018. The condo monthly PITI payment was $1,657.
The median price means half the sales went at a higher price and half at a lower price.
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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