Increases in the median price of homes and condominiums slowed and sales softened during July as traditional buyers flocked to the Santa Clarita Valley housing market and the inventory of homes for sale increased by nearly 50 percent, the Southland Regional Association of Realtors reported on Monday, Aug. 25.
The median price of single-family homes came in at $465,500, up 8.3 percent over 12 months ago while the condominium median of $285,000 was off 5.0 percent. Both are fluctuating from month-to-month as activity centers on lower-priced properties even as both hover near their respective 7-year highs.
“The rapid price rise had to moderate,” said Nancy Starczyk, president of the Association’s Santa Clarita Valley Division. “Each tick up in prices locked more prospective buyers out of the market. Some owners still mistakenly expect prices to keep going up, up and up, yet that’s not realistic.”
Starczyk believes most owners now understand today’s market dynamics, which is resulting in an increase in the number of homes listed for sale and a much more stable, sustainable residential resale market.
A total of 726 homes and condos were on the Association’s Multiple Listing Service at the end of July, up 47.6 percent over a year ago. At the current pace of sales, that represents a 2.3-month supply, up from last July’s 1.5-month inventory. The market needs about a 6-month supply to achieve some balance.
“The return of traditional sellers and the demise of distressed properties are needed for the market to achieve long-term balance and that’s what has happened,” said Jim Link, the Association’s chief executive officer. “Sellers understand that price appreciation has flattened and they accept that buyers will negotiate for a lower price.”
With few exceptions, Link and Starczyk said, sellers can forget about multiple offers and bids over list price. If a property is not priced properly it will see little or no activity, they said.
Realtors closed escrow on 212 single-family home sales during July. That was off 4.1 percent from a year ago, but — following seasonal patterns and reflecting continued buyer interest — up 11.6 percent from this June. It was the highest monthly sales total so far this year.
A total of 97 condominiums changed owners, down 17.1 percent from July 2013 and unchanged from this June. June and July have been the two busiest months for condo sales so far this year.
Open escrows—a measure of future sales activity—were up 8.1 percent over a year ago.
“Consumer economic confidence is still lagging reality, yet we’re doing really well here in Santa Clarita,” Starczyk said. “Unemployment is down to 5.3 percent, we’re gaining 1,000 jobs a year, tourism is up 9 or 10 percent and our schools continue to achieve high standards.
“Combining all that with our beautiful quality of life makes this a wonderful community in which to raise a family,” she said. “There are a few lingering problems from the recession, yet even those, such as distressed properties, are fading away.”
The share of distressed home and condo sales Valleywide continued to slip during July. Of the 309 combined residential sales, 4.2 percent were foreclosure-related, 6.1 percent were short sales, while 88.3 percent were traditional standard sales. Those numbers are light years away from figures reported as recently as February 2013, when 7.8 percent of sales were foreclosures, 36.2 percent short sales and standard sales came in at 48.4 percent.
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.