Sales throughout the San Fernando Valley of existing single-family homes increased 15.5 percent during June, the Southland Regional Association of Realtors reported on Thursday, July 23. It marked the 12th consecutive month that sales came in higher than the prior year.
A total of 775 homes changed owners during June compared to 671 in June 2008 and 708 this May for a month-to-month increase of 9.5 percent.
Condominium sales also increased during June with the 236 condos that changed owners up 2.6 percent from the prior year and 4.4 percent above the May total.
"With resale prices now firming up and many properties selling above list price, what we need now are more properties to sell and lenders who are willing to write loans," said Ana Maria Colon, president of the Southland Regional Association of Realtors.
"Personally, because there are so few listings on the market I cannot find anything for a bunch of my buyers," Colon said. "Yet even if we found the perfect property, getting a loan is still extremely difficult."
Colon and Jim Link, the Association's chief executive officer, agreed that the market cannot fully recover until lenders accept that it is no longer a declining market and gradually release for sale whatever foreclosed properties they are holding onto.
"Most analysts anticipate another wave of foreclosed properties," Link said. "However, if lenders release properties in an orderly manner there appears to be enough demand to absorb them without stifling the burgeoning market recovery."
Yet lenders remain hesitant as they await further evidence that resale prices have stabilized and, in some categories, are already on the rise.
Reflecting the fact that many sales receive multiple offers at higher than list price, the median resale price decline has slowed dramatically with much of the decline due to the concentration of sales in the lower price ranges rather than real drops in value.
The median price of the 775 homes sold during June was $375,000, down 13.0 percent from a year ago when it stood at $431,000. However, on a month-to-month basis, the median -- the point where half the homes sold for more and half for less – increased 7.1 percent.
The median has been bouncing up and down from $340,000 to $375,000 since November, supporting arguments that the freefall that began in October 2007 is over. The median has been lower than the prior year in each of the last 21 months.
"We're seeing increased activity in price ranges above the median," Link said. "When banks accept that prizes have stabilized we should see further improvements in the market.."
For now, however, obtaining a home loan in any amount remains challenging and requires professional assistance.
"If a buyer does not have a 720 FICO score and a 20 percent down payment it's almost impossible to get a loan," Colon said. "The reality is that most lenders are still calling any loan above $417,000 a jumbo, which typically triggers extra points and fees.
"Bank guidelines are still very strict," Colon said. "The situation is improving, but very slowly."
The median price of condominiums sold during June was $226,000, down 23.4 percent from June 2008, but 22.2 percent higher than the median reported this May.
Pending escrows – a measure of future resale activity – were up 24.0 percent with 1,399 open escrows throughout the San Fernando Valley at the end of June.
There were 3,359 active listings throughout the Valley. That was down 51.6 percent from the 6,935 listings of a year ago.
Despite public perception that the local inventory is high, at the current pace of sales, the properties currently listed for sale represent a mere 3.3-month supply. That compares with the 7.7-month supply reported in June 2008.
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.