Homes sold in the San Fernando Valley during October posted a median price of $521,000, the first double-digit increase in the median since May, the Southland Regional Association of Realtors reported Monday, Nov. 24.
After 18 consecutives months—beginning in November 2012 and ending this April—the single-family median price had double-digit gains, with most increases above 20 percent, including a price jump of 33.3 percent September 2013. But since May price increases in around 5 percent.
“The single-family median price appears to have peaked in August at $543,000,” said Roger Hance, president of the Southland Regional Association of Realtors. “The increases since then have been modest and more in line with more balanced market. So, it’s a bit surprising to see a 12 percent gain in October, although with interest rates dropping even lower recently, the year may well end with more unusual notes.”
With sales sluggish and inventory up slightly, the condominium median price of $317,000 fell 3.9 percent compared to a year ago. While up 0.6 percent from September, the October median was the fourth consecutive decline in the median price after a string of mainly double-digit consecutive monthly increases that began in June 2012. Many of those gains were in the high 30 percent range, with two above 40 percent.
“That was when investors and all-cash buyers took controlled the market, but those days are behind us now, with affordability being important to home and condo buyers alike,” said Jim Link, the Association’s chief executive officer. “That means sales slow down if prices get too high, which appears to be what’s happening now, although activity remains intense for high-end homes, despite seasonal forces.”
Indeed, members of the Southland Regional Association of Realtors helped buyers close 494 escrows on single-family homes during October. That was down 5.2 percent below a year ago, though up 0.6 percent from this September.
And, a total of 152 condominiums changed owners in October, down 25.1 percent compared to October 2013, while off 8.4 percent from September.
Link and Hance agreed that with interest rates having dropped lower recently anyone interested in buying a home over traditionally slow closing months of each year will find a slightly larger inventory and sellers more realistic on their asking price.
There were 1,847 active listings at the end of October, up 18.5 percent from a year ago. At the current pace of sales, that represents a 2.9-month supply compared to the 2.2-month inventory of October 2013. Ideally, a six-month supply would yield near balance between buyers and sellers.
While the inventory continues to grow, it’s at a slower pace. From February through June the inventory increased by more than 36 percent each month, peaking at 47.2 percent in May. Since then, it continues to grow at a lower double-digit pace, increasing as slowly at 10.8 percent in September.
Traditional buyers purchased most of the homes sold last month, not investors, who have largely vanished from the market. That is yielding a more stable, less volatile market.
Of the total 646 combined escrows reported in October, a record low 2.6 percent were foreclosure related, or Real Estate Owned properties. Standard sales, typically involving a traditional buyer, accounted for a near-record high 90.6 percent of all purchases. Short sales, where the lender accepts a home sale price that is less than the outstanding loan, came in at 6.4 percent of the total.
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.