The median price of single-family homes that closed escrow during February hit $600,000 for the first time since 2006, yet remained 6.7 percent below the record high, while the supply of homes listed for sale ticked up slightly, the Southland Regional Association of REALTORS® reported on Friday, March 23.
The median—meaning half sold at a higher price and half for less—increased 12.1 percent from a year ago. The record-high home median price of $643,000 was set in April 2006.
The median price of condominiums that changed owners was $380,000, also up 12.1 percent from a year ago, but off 2.6 percent from this January. The February condominium median price was 4.3 percent below the record high of $397,000 set in January 2006.
“With interest rates on the rise, a market loaded with buyers may get even more competitive,” said M. Dean Vincent, the 2017 chairman of the Santa Clarita Valley Division of the Southland Regional Association of REALTORS®.
“Frankly, it’s surprising we haven’t already surpassed the record prices of last decade,” he said. “The upward pressure on prices can only increase as more buyers jump into the market. Even with a slight increase in listings, there simply are not enough properties available to satisfy demand.”
At the end of February there were 386 active home and condominium listings, which was up 5.8 percent from a year ago. It was the first year-to-year increase in the inventory after 14 consecutive months of declines and a general downward trend dating back to 2015.
At the current pace of sales the 386 listings represented a 2.1-month supply, which was the first time that statistic rose above the 2.0-month benchmark since a year ago January. While a welcome improvement, the inventory remained closer to the record low—312 listings in March 2013—than the record high of 2,630 listings reported in September 2006.
“Just as today’s rising interest rates prompt prospective buyers to get off the fence and into the market, owners locked into yesterday’s historically low rates appear to be hesitant to list their home for sale,” said Tim Johnson, the Association’s chief executive officer.
“Those are just two of a raft of competing forces that hinder an increase in home sales,” Johnson said. “The demand for housing is fierce enough to prompt multiple offers, yet the supply so woefully inadequate that the resulting higher prices, which no doubt benefit sellers, actually seem to make the market even more complicated.”
“With interest rates likely to move higher throughout the year, buyers will be even more eager for a home of their own,” he said. “Yet local owners seem unlikely to change course and decide to sell, even with the lure of the highest resale prices in a decade.”
REALTORS® helped close escrow on 127 single-family homes during February—down 3.8 percent from a year ago. They also assisted 59 condominium transactions, which were off 20.3 percent from February 2017, but up 7.3 percent from this January.
The high resale prices have virtually eliminated distressed sales from the local market, the Association reported. Of February’s total 186 home and condo sales, 97.8 percent were standard transactions involving a traditional buyer and seller.
There were zero condominium foreclosure-related and short sales and only one transaction in each category for single-family homes. In a short sale the lender agrees to a purchase price that is less than what is owed on the house.
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.
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