The median price of homes that closed escrow during March throughout the San Fernando Valley set a record high of $671,500, the Southland Regional Association of REALTORS® reported on Tuesday, April 25.
The median was up 13.3 percent from a year ago March. It also was 2.5 percent higher than the prior record of $655,000 set in June 2007, the height of last decade’s boom housing market.
For most of 2016 the local home median price was stuck on a plateau in the low $600,000 range as buyers resisted paying more and the pool of buyers who could afford rising prices in all price ranges shrank.
“It’s age old supply and demand at work,” said Nancy Starczyk, president of the 9,600-member Southland Regional Association of REALTORS®. “Demand for housing is high and buyers outnumber the supply of homes listed for sale, which leads to dreaded bidding wars.”
Buyers able to pay the most get the prize, yet the region sees rents rising rapidly and workers with fewer housing options, she said.
Southern California remains a draw thanks to its fine weather, access to mountains and beaches, and vibrant economy,” Starczyk said. “Yet few newcomers appreciate that housing is so much more expensive here than the rest of the nation, that options for new construction are limited, and that local communities resist higher density.”
The median price of homes sold may have set a new record, but sales were down sharply from a decade ago.
A total of 478 single-family homes changed owners during March—63.8 percent below the record high of 1,321 home sales set in August 2003.
The 478 closed escrows were up 1.7 percent from a year ago and, following seasonal patterns, 48.9 percent higher than this February.
REALTORS® also assisted the sale of 183 condominiums during March, down 3.2 percent from a year ago, yet 24.5 percent higher than February. The median price of condominiums came in at $395,000, up 3.4 percent from 12 months ago yet off 1.0 percent from February. The March condominium median price was 4.8 percent below the record high of $415,000 set in May 2009.
The inventory of properties listed for sale on the Association’s Multiple Listing Service rose 5.7 percent from the February total, which was at the lowest in five years. Yet the 1,165 active listings were down 12.7 percent from March 2016, representing a mere 1.8-month supply at the current pace of sales. A 6-month supply was the standard over 30 years, but since 2012 the supply rarely has risen close to a 4-month supply, typically hovered just above 2 months, and occasionally, as happened in March, dropped below a 2-month inventory.
Pending escrows—an indicator of future sales activity—totaled 857 open escrows, up 0.4 percent from a year ago.
Distressed sales continued to play a minor role in the local residential resale market. There were 10 foreclosure-related sales, which represented a 1.5 percent share of the market, and eight short sales for a 1.2 percent share. In short sales the lender agrees to a sale price that is lower than the outstanding balance on an existing loan. Traditional buyers and sellers consummated 95.6 percent of the 661 homes and condominiums that changed owners during March.
The Southland Regional Association of REALTORS® is a local trade association with more than 9,600 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
— 30 —