The median price of single-family homes sold during May rose to the highest level since 2008 even as the inventory of homes and condominiums listed for sale increased by 47 percent, the Southland Regional Association of Realtors reported on Thursday, June 19.
A total of 522 single-family homes closed escrow last month throughout the San Fernando Valley, a number that was down 13.6 percent from a year ago and off 4.4 percent from this April.
Realtors also closed escrow on 185 condominiums during May, down 26.9 percent from a year ago, but up 1.1 percent from this April. Both month-to-month declines marked one of the few times on record that sales fell from April to May, a time of year when home buying activity typically increases.
“It’s great that home buyers no longer have to compete with investors for local homes,” said Roger Hance, president of the Southland Regional Association of Realtors. “Yet still too tight lending standards, slightly higher interest rates on home loans, and rising resale prices pose an affordability challenge to many prospective buyers.”
The median price of homes sold last month hit $520,000, the highest median price reported since February 2008. That marks the third time the median rose to $520,000, behind a year ago May and again in September. The median has been bouncing from as low as $475,000 to $520,000 since last May with annual increases moderating from the double-digit gains of prior years.
The median price of condominiums came in at $325,000, up 4.8 percent over a year ago May and 4.2 percent higher than this April. The condo median peaked at $335,000 in August
“Price increases have been moderating as inventory rises and buyers wrestle with affordability issues,” said Jim Link, the Association’s chief executive officer. “The unsustainable double-digit price leaps seen in 2013 prompted many investors to leave the market, which worked in favor of traditional buyers.”
In a further sign that market is normalizing, traditional buyers purchased 88.3 percent of the homes and condominiums sold during May.
Foreclosure-related Real Estate Owned property sales came in at a mere 2.8 percent, while short sales, where lenders allow a sale at a price lower than the balance of the existing loan, registered 7.9 percent.
While each tick up in prices helps owners who saw resale values decline during the recession and who may still owe more than the home’s resale value, those same price increases reduce the pool of prospective buyers, Link said.
“Nonetheless, we’re hopeful that market activity will pick up in the months ahead, especially as buyers realize they have more options with today’s larger inventory,” Link said.
The combined residential inventory of 1,681 total active listings was up 47.2 percent over a year ago. It was the highest monthly total since April 2012. At the current pace of sales, that represents a 2.4-month supply, up from last year’s 1.3-month supply.
The Southland Regional Association of Realtors® is a local trade association with more than 8,900 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
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