Saturday, October 04, 2008

San Fernando Valley Market Update

Home Sales Surge 21% in the San Fernando Valley During August

Sales of existing single-family homes surged 20.7 percent during August throughout the San Fernando Valley, the Southland Regional Association of Realtors reported Thursday, Sept. 25.
Realtors closed escrow on 666 homes, up 114 transactions from a year ago August.

“The increase in sales activity occurred before news of the financial meltdown on Wall Street, but even though we won’t know for some time how that crisis will be resolved, there still are many buyers out there sorting through a solid selection of homes for sale at the best prices in years,” said Mary Funk, president of the Southland Regional Association of Realtors, which serves the San Fernando and Santa Clarita Valleys.

“Interestingly, the inventory is not all that high,” she said, “but soft resale prices, especially on the Valley’s relatively limited selection of bank-owned properties, continue to lure more and more buyers into the market.”

With the purchase of a single-family home now within reach of more buyers, condominium resale activity has not picked up as much momentum. A total of 172 condos changed owners, down 8.5 percent compared to 188 condo sales in August of 2007.

The median price of homes sold last month fell 34.1 percent to this August’s median of $425,000 – down $220,000 from the figure reported in 2007, a steep drop from last year, although from month-to-month the rate of decline appears to be flattening out.

The August median was in a range not seen since 2004 when prices were increasing at a 26.3 percent annual pace.

The condo median price of $275,000 was off 29.3 percent from August 2007.
“Assuming current rescue efforts in Washington stabilize the economy and replenish the supply of mortgage funds for new loans, Realtors expect prices will stabilize in 2009 and sales activity will post further gains,” said Jim Link, chief executive officer of the Southland Regional Association of Realtors.

“Uncertainty breeds opportunity for astute buyers,” Link said. “The best homes will be purchased before the herd gets back into the market. Come Spring, prices may still be favorable, but the selection may be smaller and interest rates higher, perhaps negating any price discounts.”

There were 6,447 active listings throughout the San Fernando Valley at the end of August. That was down 16.3 percent from a year ago and off 7.2 percent from July of this year.
At the current pace of sales, the inventory represents a 7.7-month supply, just above the 5- to 6-month supply indicative of a balanced market.

Pending escrows – a measure of future resale activity – increased 82.6 percent from a year ago, supporting the conclusion that more people are taking advantage of the best buyers’ market in decades.

The Southland Regional Association of Realtors®

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