Summer temperatures were scorchingly hot, yet the local housing market yielded tepid numbers due to a systemic shortage of homes for sale and prices rising too high for many would-be buyers, the Southland Regional Association of REALTORS® reported on Tuesday, Oct. 24.
Realtors guided the closing of escrow on 542 single-family homes and 195 condominiums during September throughout the San Fernando Valley. Both numbers were down from a year ago, 3.6 percent and 4.4 percent, respectively.
If single-family homes that close escrows for the final three months match a year ago, 2017 may post a slight increase in the annual tally, though nonetheless, it will fall below the 6,000-sale benchmark for the second consecutive year. For comparison, 13,878 homes changed owners in 2002 while the record high sales total of 15,263 was in 1988.
“Prices are near pre-recession highs, or even higher, in some areas,” said Nancy Starczyk, president of the Association. “Some experts believe prices may have peaked, but there are those who feel they could go higher.
“Most real estate economists are predicting a strong year ahead. They forecast solid, steady growth—as much as 5 percent,” she said. “Homebuyers will need to be creative in matching their income and buying power to the lofty prices we see locally.”
Starczyk noted that as Baby Boomers age many have chosen to stay in their existing homes, which translates into fewer homes listed for sale and, as a result, added upward pressure on resale prices.
The median price of the 542 homes that sold during September was $660,000, up 6.5 percent from a year ago and 1.7 percent below the record high of $671,500, which was set this March.
The condominium median price of $419,900 was up 12 percent from a year ago—a mere $100 below the record high established this June, according to Association statistics.
“The key in 2018 and beyond is all about finding ways to increase inventory,” said Tim Johnson, the Association’s chief executive officer.
“Recent housing bills signed by Governor Brown are steps in the right direction,” he said. “However, we need to create more paths for people who wish to buy or to sell, and for developers to build.
“Most importantly,” Johnson said, “we have to keep our eye on the ball. The emphasis must remain on creating more inventory.”
There were 1,376 combined residential active listings at the end of September. That was down 17.0 percent from a year ago.
The active listing total represents a 1.9-month supply at the current pace of sales. Every month since January 2015 has posted a decline in inventory, which followed 19 consecutive months of increases.
An active inventory of around 1,200 listings per month appears to be the “new norm,” Starczyk and Johnson agreed.
By comparison, the boom of last decade peaked with 7,730 active listings in October 2007 or the record high 14,976 in July 1992. Instead, the September active listing tally was closer to the record low of 995 listings set in December 2012.
Of the 737 combined residential sales last month assisted by Realtors, 718 or 97.4 percent were standard sales. There were seven foreclosure-related transactions, for a 0.9 percent market share, and five short sales, representing 0.7 percent of all closed escrows.
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.
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