In a testament to the strength of the local economy, the median price of the 2,230 single-family homes sold during 2014 rose to $472,250, up 12.0 percent over 2013 to its highest level since 2007, the Santa Clarita Division of the Southland Regional Association of Realtors reported Monday, Jan. 26.
It was the third consecutive increase in the annual home median price after five consecutive annual declines, including the 22.0 percent plunge in 2008 as the nation dropped into a deep recession.
Santa Clarita Realtors negotiated $1.4 billion in home and condominium sales during 2014, sales that also generated many millions more in additional benefit for the local economy in related transactions, such as appliance and furniture sales or landscaping and construction projects.
“I think the single-family home median price soon will cross the $500,000 benchmark, but it will stay well below the record high of the last decade,” said Bob Khalsa, the 2015 president of the division. “Sales will rise everywhere because sellers again have equity. When an owner sells their home, a second sale typically occurs as they purchase a replacement residence.
“Santa Clarita is a very strong, highly desirable community offering geographic and quality of life benefits,” Khalsa said, “yet increases in the median price now will be much more gradual, based mainly on supply and demand, not investor activity or distressed prices.”
The annual median price of condominiums sold in Santa Clarita during 2014 came in at $278,458, up 8.3 percent over 2013. The single-digit increase was welcome after the 33.8 percent leap in the condominium median price in 2013.
“I think we’re in for a better market,” said Jim Link, the Association’s chief executive officer. “The market has calmed down since the storm of investor activity passed, clearing the way for traditional buyers and sellers to resume their pivotal roles in the market, assuming nothing crazy happens in the overall economy.”
Both Link and Khalsa predicted 2015 will see increased resale activity with moderate price increases.
Smart owners will list their home at the right price and savvy buyers will compete against each other over a growing, yet-still-limited inventory. However, buyers will refuse to pay more than a home is worth, even it means missing a sale or purchase and staying in their current residence a bit longer.
Realtors closed escrow on 2,230 single-family home sales during 2014. That was down 1.8 percent compared to 2013 and the second consecutive drop in the annual total. After posting single-digit increases in 2011 and 2012, sales fell less than 2 percent in each of the last two years.
Condominium closed escrows during 2014 totaled 953 units, down 19.8 percent over 2013 for the first decline in condo sales after five consecutive annual increases, which included the near 16 percent jumps of 2012 and 2013. Condominium sales have been hampered by a failure of home owners associations to ensure their complexes qualify for low-down payment FHA-covered mortgages.
“Delinquency rates at HOAs are dropping,” Khalsa said, noting that some of the drop in condo sales last year resulted as first-time buyers shifted their focus to single-family homes, which stayed in reach due to lower interest rates on home loans, rising financial fortunes of some households, and moderate price increases.
December home sales in Santa Clarita fell 7.0 percent to 227 homes, yet increased 14.6 percent from this November. Condominium sales in December total 81 units, down 22.1 percent from December 2013, but up 30.6 percent from November.
Active inventory rose 8.3 percent to 511 listings, while pending escrows, a measure of future resale activity, increased 3.6 percent to 227 open escrows. Short sales accounted for 8.1 percent or 25 transactions during December. There were a mere five foreclosure-related sales, or 1.6 percent of the residential total, while standard sales came in with an 89.3 percent share of the combined residential December market with 275 transactions.
The Southland Regional Association of Realtors® is a local trade association with more than 9,100 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.