An already extremely tight inventory bumped into rising interest rates to further complicate home sales during May in the Santa Clarita Valley, which saw drops in home and condominium closed escrows compared to a year ago, the Southland Regional Association of REALTORS® reported on Thursday, June 21.
A total of 226 single-family homes changed owners last month. That was down 8.1 percent from a year ago but following seasonal patterns up 18.3 percent from this April. Sales through the first five months of 2018 were down 2.0 percent from the same period a year ago.
Similarly, 105 condominiums closed escrow during May were down 1.9 percent from a year ago, though up 105 percent from April. Condo sales from January through May fell 10.4 percent compared to the same period of 2017.
“The 30-year, fixed-rate mortgage saw a jump of 20 basis points in just one week during May,” said M. Dean Vincent, chairman of the Santa Clarita Valley Division of the Southland Regional Association of REALTORS®. “That pushed rates to the highest level since 2014. Higher mortgage rates and still rising home resale prices hurt affordability, limiting the number of people who can afford to buy, which may translate to fewer sales.”
The median price of homes sold during May was $615,000, up 9.8 percent from a year ago. The local median home price has yet to surpass the record high of $643,000, which came in April 2006. May and this January marked the two times since 2007 that the median has come in at or higher than the benchmark of $600,000.
The condominium median price of $404,000 was up 9.2 percent from May 2017, but fell 1.5 percent from the record high $410,000 posted this April. The May median price marked only the second time on record the median has posted higher than the benchmark of $400,000.
“An expanding inventory would temper price appreciation,” said Tim Johnson, the Association’s chief executive officer. “Yet the lack of supply combined with expected additional interest rate increases later this year will limit what buyers are willing to pay for a home, and that may hold price increases in check.”
The Association reported 470 active listings valleywide at the end of May. That was down 2.9 percent from a year ago and represented a mere 1.4-month supply at the current pace of sales.
With only three exceptions, every month since February 2015 has posted a decline from the prior year in the number of active listings, though the double-digit drops seen last year have yielded to single-digit declines since February.
Of the 331 combined residential closed escrows seen this May, 98.2 percent were standard sales involving traditional buyers and sellers. There were two foreclosure-related transactions, one home and one condominium, or 0.6 percent of the May market, and only one home short sale, for a 0.3 percent market share.
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.