San Fernando Valley Single-Family Homes and Condominium Resale Statistics

San Fernando Valley single-family home median price hits record high as sales slow down

Reflecting ongoing demand for housing and confidence in the local economy, the median price of single-family homes hit a record high during May even as home sales continued to soften throughout the region, the Southland Regional Association of Realtors reported Thursday, June 27.

A total of 629 homes changed owners last month, a drop of 26.5 percent from a year ago, but up 15.4 percent from the total reported this April.

Condominium sales fell 37.5 percent compared to a year ago to a total of 250 transactions. Condo sales also rose compared to April, up 15.7 percent.

"While there is zero evidence that prices will drop dramatically, the market has shifted in favor of buyers in the sense of offering better choices, more time to negotiate, and credit options that remain generally favorable," said Winnie Davis, president of the Southland Regional Association of Realtors.

"All segments of the market report fewer sales, but the entry level price range is feeling the pinch more than others partly because of stricter rules when it comes to qualifying for a home loan," Davis said. "But that is not necessarily a bad thing."

Stricter loan qualifying rules may, unfortunately, disqualify some buyers whose credit is less than stellar, but that also means there will be fewer problem loans in the months and years ahead.

Relatively few borrowers in the San Fernando Valley are experiencing difficulty making the monthly loan payment or are at risk of losing the house to foreclosure.

Nonetheless, today's tighter loan qualifying standards have a local impact that comes out by way of fewer sales in the entry level price categories.

"The economy is strong and credit remains readily available, yet some buyers are still sitting on the sidelines waiting to see what will happen with the housing market," said Jim Link, the association's executive vice president. "When some prospective buyers finally come to the market they expect to see homes with steeply discounted list prices, yet that is simply not happening."

Instead, Link said, most sellers - especially those who heed the advice of their Realtor - have already adjusted the asking price to current market conditions.

Reflecting the ongoing demand for housing, the median price of the 629 single-family homes sold during May rose 8.3 percent from a year ago to a record high of $650,000. That was up 4.0 percent from the previous high of $625,000 set this April.

The condominium median price of $387,000 was down 2.8 percent from a year ago. The record high of $415,000 was recorded in February 2006.

"Some buyers are surprised when they see that prices are not falling dramatically," Link said. "Foreclosures in other areas of the country may be driving prices down in those regions, but local buyers will be disappointed if they assume it is happening here.

"Parts of California that had alot of new construction, heavy activity by speculators or were primarily catering to buyers who needed to take advantage of low- or no-down adjustable loans to qualify may be experiencing more problems," Link said. "But the housing market in the San Fernando Valley is a mature, balanced market which, so far, is capable of adapting to current market conditions."

There were 6,697 single-family homes and condominiums listed for sale throughout the Valley at the end of May, up 22.4 percent from a year.

At the current pace of sales, the inventory represents a 7.6-month supply, which is only slightly above the 5- to 6-month supply which experts believe represents a balanced market.

The number of active listings often lingered at less than a 1-month supply during the recent sellers' market . At the height of the pure buyers' market of the early 1990's, active listings hit a record high of a 23-month supply.

Courtesy: Southland Regional Association of Realtors