Home sales increased 110.5 percent during October throughout the San Fernando Valley, propelled by a 30.5 percent decline in the median price, the Southland Regional Association of Realtors reported on Tuesday, Nov. 25.
A total of 745 single-family homes changed owners, up 391 transactions from the 354 total of October 2007.
Sales also increased 4.5 percent on a month-to-month basis. After hitting a low point during this cycle of a mere 323 sales in January, activity has been steadily gaining momentum, driven by the presence of foreclosed properties offered at steeply discounted prices.
"Some houses that sold not that long ago for $600,000 now can be purchased for under $400,00," said Mary Funk, president of the Southland Regional Association of Realtors. "If you missed out then, don't miss out now."
Funk said that while qualifying for a loan is more difficult than during the go-go days, mortgages are in fact available at favorable interest rates, generally at or below 6 percent. Plus, FHA loans now allow housing payments to go as high as 41 percent of a household's income.
"But the financing market is in flux," Funk said. "What you could do last week you might not be able to do next week. Lending rules and regulations are changing on a weekly basis, but if you get into in the pipeline with favorable terms they will leave you alone."
Sales of existing condominiums also are on the rise, although not at quite the pace of homes as buyers who had been priced out of the market are focusing on single-family homes.
A total of 234 condos changed owners last month, up 82.8 percent from a year ago and 10.9 percent ahead of September. It is the highest monthly total since sales hit the low point of this cycle with 105 condo transactions in January.
While sales are rising, prices continue to plummet. The median price of the 745 homes sold last month came in at $410,000, down 30.5 percent from a year ago. However, prices did rise 4.5 percent over September, one of the few month-to-month gains since the bottom fell out of the financial market.
The condo median price of $225,000 was down 40.5 percent from October 2007, a slide that began in July of 2007, gained momentum, but now appears to be slackening.
"Many buyers and sellers still are not realistic when it comes to pricing," said Jim Link, the Association's chief executive officer. "Sellers want to list at too high a price while buyers expect price discounts that often make little sense.
"Still, there are people out there who have overcome the uncertainty and see this as great window of opportunity to get into the market before prices stabilize and resume an upward march," Link said.
Pending escrows - a measure of future sales activity - were up 97.8 percent from a year ago. There were a total of 1,180 open escrows at the end of October compared to the 606 of October 2007.
Despite public perception to the contrary, the inventory of properties for sale is not that large.
There were 5,918 active listings throughout the San Fernando Valley at the end of October. That was down 23.4 percent from a year ago and off 1.5 percent from this September.
At the current pace of sales the inventory represents a 6.0-month supply. Except for the presence of many foreclosed properties, a 6-month supply would represent a balanced market, where neither buyers nor sellers hold a negotiating edge.
By comparison, the inventory held at less than 1-month supply during the boom days of the recent sellers market, while during the economic recession of the early 1990s it hit a record high 23-month supply with the inventory at nearly 15,000 listings.
With many discretionary sellers deciding to wait until the market stabilizes, the inventory has been steadily declining since hitting a high for this cycle of more than 7,700 listings in September 2007.
The Southland Regional Association of Realtors® is a local trade association with more than 12,500 members serving the San Fernando and Santa Clarita valleys. SRAR is one of the largest local associations in the nation.
About Meredith Wallace:
For a free home buyer or seller guide, please call me at (818)624-1270. I specialize in residential real estate in the San Fernando Valley.
These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.
