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Bob Khalsa: July good for home and condo sales

Posted: August 28, 2013 2:00 a.m.
Updated: August 28, 2013 2:00 a.m.

Bob Khalsa

 

Home and condominium sales and prices picked up momentum during July throughout the Santa Clarita Valley.

Single-family home sales increased 8.9 percent compared to a year ago with the 221 closed escrows the highest monthly tally since June 2012. Home sales have jumped 123.2 percent from the record low of 99 sales set in January 2008.

Similarly, condominium sales during July soared 33.0 percent over a year ago with the 117 closed escrows hitting the highest mark this year. Condo sales have risen a whopping 277.4 percent from the Great Recession’s record low of 31 condo sales, which also came in January 2008.

Overall, it’s a fine housing market, with solid improvements in all categories. There are lingering problems, yet demand is high, inventory shows signs of improving, there are fewer distressed properties, fewer underwater owners, traditional buyers are returning in force. What’s not to like?

The median price of the single-family homes that changed owners last month equaled the $430,000 reported in June, making it the highest median price since October 2008. The July median was up 22.9 percent from a year ago and 26.5 percent higher than the record low for this cycle, which came in November 2011 at $340,000.

The condominium median price for July rose to $300,000, up 76.5 percent over July 2012, which also was the record low for this cycle of $170,000 set in July 2012.

“Even with inventory still extremely tight, we’re not going to see any frenzy that drives prices to wild heights,” said Jim Link, Southland Regional Association of Realtors’ chief executive officer. “And, to have nearly 77 percent of sales going to traditional buyers proves that the local market is on the right track, that distressed sales will continue to diminish. We’re approaching a normal, healthy market.”

Association statistics indicated that standard sales captured 76.6 percent of all closed escrows during July, a dramatic improvement from the 30 percent and 40 percent figures reported in 2012. Real Estate Owned sales — known as REOs, which are properties held by lenders — accounted for a mere 5.3 percent of closed escrows last month. Short sales, where the lender allows a sale at a price lower than the balance on a loan, came in at 17.5 percent. Short sales captured 47.9 percent of closed escrows in November.

Even the tight inventory showed signs of improving. The year-to-year gain of 0.4 percent from a year ago was the first increase in active listings in more than a year. The inventory had been posting double-digit decreases every month since September 2011 with many months coming in with 60 percent and higher declines.

The 492 active listings at the end of July was the highest inventory since July 2012 and a slight improvement from the record low of 312 listings set in March. Nonetheless, the inventory represented a mere 1.5-month supply at the current pace of sales, well below the 6-month supply needed to have a balanced market.

Bob Khalsa is President of the Santa Clarita Valley Division of the Southland Regional Association of Realtors.

David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.

 

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