Home and condominium sales during April fell 47 percent as a direct result of the “safer at home” orders implemented to halt the spread of the novel Coronavirus Pandemic, the Southland Regional Association of REALTORS® reported Thursday, May 14.
Listings and new open escrows also fell, while the median price of properties that closed escrow during April continued a years-long trend of price increases.
There were 969 active listings on the local Multiple Listing Service at the end of April, a decline of 23.2 percent
“Listings had been falling long before the Coronavirus, with the April decline being the 11th consecutive monthly drop,” said Nancy Troxell Carnahan, president of the Southland Regional Association of REALTORS®. “I suspect the May numbers will reflect how owners feel about listing their home in the middle of a pandemic. Some will see opportunity, some will need to sell, while others will exercise great caution and decide to wait.”
Pending escrows — a measure of future sales activity — totaled 297, which was a decline of 55.8 percent from April 2019.
Realtors assisted in the close of escrow of 263 single-family homes last month, a decrease of 232 transactions or 46.9 percent compared to April 2019. It was the lowest monthly total on record, breaking the prior record low of 266 sales set in February 2019.
Similarly, 82 condominiums changed owners in the midst of the coronavirus lockdown, a drop of 47.1 percent from the prior year or 73 fewer transactions. That also was a record low, beating the 94 sales posted in January 2019.
“I find it amazing that REALTORS® were successful in helping some clients who had properties that were in the pipeline, in an open escrow, when the lockdown was ordered,” Tim Johnson, the Association’s chief executive officer. “But given the near complete shutdown of society, the plunge in sales was fully expected.
“What happens next regarding real estate, hinges on when it will be safe to lift the stay at home orders and how soon people can get back to work,” he said. “There was pent-up demand before the Coronavirus. No doubt even more people will be looking for housing when the threat recedes.”
The median price of homes sold in April was $740,000, up 6.5 percent from a year ago.
The condominium median of $485,000 was up 11.5 percent compared to 12 months ago and set a record high.
Rising resale prices have been the reality virtually every month since the recovery began from the Great Recession.
Even though the $740,000 median price of single-family homes was up from a year ago, extremely low interest rates meant less income was needed to qualify for a standard 30-year loan with a 20 percent downpayment.
The Association’s Income-to-Loan Guide calculated that an 80% loan of $592,000 at the national average 3.31 percent interest rate would need an income of $144,747, which was 2.43 percent lower than what was needed in April 2019. The monthly PITI — principal, interest, taxes and insurance — housing cost on that loan would be $3,619 per month.
The Southland Regional Association of REALTORS® is a local trade association with more than 10,300 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.