Housing Market at a Glance: San Fernando Valley

Home sales off 25%; Median price hits record high $655,000

Despite tighter loan standards by mortgage lenders, a total of 690 single-family homes and 245 condominiums closed escrow during June in the San Fernando Valley, the Southland Regional Association of Realtors reported on Thursday, July 26. The August report is scheduled to be distributed in the first two weeks of September.

The single-family home tally was down 24.9 percent from a year ago, but up 9.7 percent from May 2007. Condominium sales of 245 units fell 22.5 percent from a year ago and were off by 2.0 percent on a month-to-month basis.

“The California and U.S. economies remain strong and continue to expand which gives the housing market a chance to readjust to a more deliberate pace of home sales,” said Winnie Davis, president of the Southland Regional Association of Realtors.

“There are still plenty of young couples who would like to buy a home, but tougher loan qualifying standards are slowing down the process and discouraging some prospective buyers,” Davis said. “That’s too bad, because there are more opportunities out there than at any point in the last four years.”

There were 6,826 active listings at the end of June, up 7.1 percent from June 2006.The record high inventory of 14,976 was set in July 1992 – which was a 17.2 month supply at the then current pace of sales. However, during the depths of the recession of the 1990s, the inventory at the then current pace of sales soared to a record high of 23.0 months.

At the current pace of sales, the today’s inventory represents a 7.3-month supply, just above the 5- to 6-month inventory which indicates a balanced market. The inventory has been climbing steadily since it hit bottom with a 1-month supply in March 2004, the height of the recent boom market.

“Although sales are slower than they had been and inventory is increasing, home prices continue to rise, but at a slower pace than they had been,” says Wayne Chang, a REALTOR® with RE/MAX of Valencia.

“The residential housing market statewide is stuck in the doldrums as prospective buyers sit on the sidelines trying to guess which way prices will go,” said Jim Link, the Association’s executive vice president. “Yet prices show no signs of falling dramatically and even if they did, any price gain might well be off set by rising interest rates on home loans.”

The median price of the 690 homes sold during June went to a record high of $655,000, up 4.8 percent over a year ago nearly 1 percent higher than the prior record of $650,000 set this July. Part of the reason the median price is inching higher is due to less activity in entry level priced homes and ongoing activity in mid-price range homes. The median price has been climbing steadily since it hit the bottom of $155,000 in November 1995.

The condominium median of $399,900 was up 1.2 percent from a year ago and 3.3 percent ahead of the May 2007 median price. The record high condo median price of $415,000 was set in February 2006.

Courtesy: Southland Regional Association of REALTORS(R)