San Fernando Valley home sales surged 16% during July as buyers raced to grab bargains; median price down 31%
Buyers jumped into the resale housing market during July, pushing sales of existing single-family homes in the San Fernando Valley up 16.2 percent from a year ago and 6.9 percent higher than the June tally, the Southland Regional Association of Realtors reported on Thursday, Aug. 29.
While still at historically low levels, sales have increased every month this year since January.
Realtors across the San Fernando Valley report a resurgence of multiple offers on properties as buyers compete with each other over the most favorably priced homes. Many of those offers present ridiculously low prices which have virtually no chance of being accepted, especially by banks that have little negotiating latitude as they try to recoup investments on foreclosed properties.
As lenders adjust to new rules, lenders will start writing loans in the higher price ranges, thus fueling a resurgence in that segment of the market, too.
Because buyers are striving to take advantage of a rare opportunity to buy a single-family home at a favorable price, condominium sales lagged during July.
A total of 205 condos sold, down 25.7 percent from a year ago and off 10.9 percent from this June. Condo sales had been moving up every month since January with July being the first decline this year in month-to-month condo activity.
The real numbers of foreclosures and short sales are likely to wane in the coming months, especially as lenders implement new procedures and the recently-approved economic stimulus package plus other moves by federal authorities begin to take effect.
The single-family median price of $435,000 was down 31.0 percent compared to a year ago. However, it did post a modest gain compared to June, up 1.0 percent. The median has been falling since the record high of $655,000 was set in June 2007.
The condo median of $280,000 was off $127,500 or 31.3 percent compared to July 2007. The condo record high of $415,000 was set in February 2006.
Link said he expects the market to remain busy and perhaps pick up added momentum in the coming months. Pending escrows – a measure of future resale activity – support that view.
There were 1,141 open escrows at the end of July, 39.2 percent higher than a year ago and up 1.2 percent from this June. It marked the third consecutive month that the pending sale total has topped the 1,100 benchmark. The inventory of homes for sale while higher than just a few years ago is not excessive.
There were 6,950 active listings throughout the San Fernando Valley at the end of July, down 3.4 percent from a year ago. Of that total, single-family homes accounted for 75 percent of the active listings.
At the current pace of sales, the active inventory represents a 7.5-month supply – slightly higher than the 5- to 6-month supply deemed to represent a balanced market.
By comparison, the inventory during the recession of the 1990s hit a record high of 14,976 in July 1992 and the inventory compared to pace of sales was three-times higher at a 23-month supply.
Contrary to an inaccurate public perception, the active inventory in the San Fernando Valley has been trending lower since November 2007 when it stood at 7,505.
Buyers confident the housing market is recovering push Santa Clarita Valley home sales up 22%
Sales of existing single-family homes increased 22.2 percent throughout the Santa Clarita Valley during July with the 237 closed escrows up 43 transactions from the 194 total of a year ago, the Southland Regional Association of Realtors reported on Thursday, Aug. 28.
Home sales increased on a month-to-month basis for the sixth consecutive month, rising 3.5 percent in July compared to June.
Condominium sales also increased, rising 2.4 percent for a total of 85 closed escrows, two sales higher than a year ago and 10 sales ahead or 13.3 percent higher than this June.
While the market will not return to normal until foreclosed properties and so-called “short sales” work their way through the system, statistics released by the Southland Regional Association of Realtors indicate that the market has changed direction.
In a growing number of instances, Realtors across the Valley report, multiple offers have reappeared as people strive to capture homes that sold at much higher prices just a short while ago. Chastain-Shine said that one property listed at $450,000 recently attracted 32 purchase offer.
Most of the activity is concentrated on homes listed for less than $500,000, she said, which has the effect of pulling the overall median price lower.
The median price of single-family homes sold last month was $441,000, down 22.6 percent from a year ago, well below the record high of $643,000 set in April 2006. The median has been sliding on a consistent basis since then and its drop has accelerated as buyers focus on entry-level-priced housing.
The condo median price of $285,000 was down 20.8 percent from a year ago and unchanged on a month-to-month basis. While still above 20 percent, the decline in the median price for both single-family homes and condos appears to be slowing as sales activity begins to pick up.
That perspective was bolstered by statistics reporting pending escrows – a measure of future sales activity. The number of open escrows at the end of July increased 33.9 percent compared to a year ago and gained 3.5 percent over this June.
While higher than during the sellers’ boom market, the inventory of homes currently listed for sale is not excessive, despite the public’s inaccurate perception that there is a vast backlog of homes for sale.
There were 1,722 active listings throughout the Santa Clarita Valley at the end of July, down 24.6 percent from a year ago and 8.4 percent lower than this June, the Association reported. Of that total, 73 percent of the listings were single-family homes.
At the current pace of sales, the inventory represents a 5.5-month supply. Industry experts believe a balanced market – where neither buyer nor seller hold sway – appears when there is a 5- to 6-month supply.
The mismatch between the public’s view and reality often leads to fruitless negotiations as buyers think sellers must accept ridiculously low purchase offers.
Professional representation, especially when negotiating with a bank, is more vital than ever. Completing a purchase successfully today requires market knowledge and experience on the part of the Realtor and a realistic, informed view regarding prices on the part of the buyer.
Feds Takeover Fannie Mae and Freddie Mac - Federal officials on Sunday unveiled an extraordinary takeover of Fannie Mae and Freddie Mac, putting the government in charge of the twin mortgage giants and the $5 trillion in home loans they back. The move, which extends as much as $200 billion in Treasury support to the two companies. I believe this move affects the investors to Freddie Mac and Fannie Mae significantly, and we will see the market reaction on Monday. I do not see a big effect to current buyer and sellers. Taxpayers generally may be hit in the long term as more government funds are diverted to these two companies. (CNNMoney, 9/7)
Sources: Southland Regional Association of REALTORS®, CNNMoney.
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