Since setting a record median price for single-family homes in March at $671,500, prices have been bouncing around under that number while home sales during July in the San Fernando Valley reflected the limits imposed by an extremely tight inventory, the Southland Regional Association of REALTORS® reported Friday, Aug. 18.
The median price of single-family homes sold during July was $665,000, up 6.7 percent from a year ago, but off 3.9 percent from this March. The July median price was 1.0 percent below the record high of $671,500 set this March.
Similarly, after establishing records for two consecutive months, the median price of condominiums of $410,000 was up 3.3 percent from a year ago, but 2.4 percent below this June’s record of $420,000.
“Yes, this year we finally surpassed pre-2005 price records,” said Nancy Starczyk, president of the 9,800-member Southland Regional Association of REALTORS®. “Yet I do not believe that prices in Southern California are about to drop. More importantly, I do not believe we are in a bubble that is about to burst.
“In fact,” Starczyk said, “I believe prices will continue to increase, albeit gradually, over the next few years, barring any economic disaster.”
Instead, Starczyk believes that given the supply shortage — which she said “continues to be the bane of this market” — and the wealth of well-qualified buyers, continued gradual increases in prices are “perfectly reasonable and expected.”
The Southland Regional Association of REALTORS® reported 1,426 active listings at the end of July. That was off 17.1 percent from a year ago. At the current pace of sales, the July inventory represented a 2.1-month supply, which is well short of the 30-year annual average of a 5.9-month supply.
After 18 months of increases in inventory from 2013 to 2014, the inventory has posted declines every month since February 2015. For comparison, the record high of 14,976 listings occurred in July 1992 and the boom of last decade peaked with 7,730 active listings in October 2007.
Tim Johnson, the Association’s CEO, stressed another distinction from a decade ago: “Unlike 2005 when people were borrowing money they could not afford to pay back, the current market is healthier, with few buyers over-leveraged.
“Now remains a good time to buy a home,” Johnson said. “Owners will see continued growth in equity. Prices most likely will rise higher, while today’s buyers can lock in low mortgage rates.”
A total of 486 homes changed owners during July, a decrease of 10.3 percent and down 18.2 percent from this June, which posted the most home sales in a year.
Home and condominium sales throughout the San Fernando Valley remain well below the boom of last decades with both off 63.2 percent and 63.7 percent, respectively.
The 190 condominiums that closed escrow in July were down 26.1 percent from June, which at 257 sales was the highest tally since July 2007.
The association reported 813 open escrows — a gauge of future sales activity — at the end of July. That was up 11.7 percent from July 2016.
Of the 676 combined residential transactions assisted by REALTORS® in July, 95.3 percent were standard sales involving traditional buyers and sellers. Foreclosure-related sales numbered eight transactions, for a 1.2 percent market share. There also were six short sales — where a lender agrees to a sale price lower than the outstanding loan balance. That represented a mere 0.9 percent share of the total.
The Southland Regional Association of REALTORS® is a local trade association with more than 9,800 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.