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SCV home sales rise as prices fall

More activity, less inventory means market could be turning

Posted: April 21, 2009 10:25 p.m.
Updated: April 22, 2009 4:30 a.m.
 

Homes sales increased again in March while the median price of homes sold dropped, ending a two-month period that seemed to signal a stabilization of prices.

“Many have decided that the bottom of the market is here or has already passed,” said Nancy Starczyk, president of the Southland Regional Association of Realtors Santa Clarita Division.

A total of 176 single-family homes changed owners in March, compared to the 151 transactions completed a year ago and the 167 homes sold in February, according to the association’s numbers released Tuesday.

“Despite the financial uncertainty, home sales have increased for 12 consecutive months over the prior year,” Starczyk said in the release. “There’s no doubt that favorable prices, great interest rates on home loans and the lowest prices we’ve seen since 2003 continue to pull growing numbers of buyers into the market,” she said.

But while the median home price hit $408,000 in February, hinting at a future stabilization of prices, the number dropped down to $400,000 in March. The $199,500 condominium median price was also down from $225,000 a month earlier.

“Most of the distressed properties on the market are in the lower price ranges, the under-$500,000 categories, which tends to drive the median price down,” explained Jim Link, the association’s chief executive officer.

Link said a major concern remains with the number of properties owned by mortgage companies and foreclosures, and properties that are being sold for less than what is owed on them, that continue to dominate the market.

“Until such time when things stabilize, we’re always going to be dealing in a situation where lenders are still more skeptical about making loans,” Link said Tuesday. “Buyers are still really jumping through hoops to get a loan.”

“What I think we’re looking to, sometime later this year is when you’ll see prices begin to inch upward instead of the median going down or staying where it is at,” Link added.

Nevertheless, a reduced supply of listings seems to represent a positive market shift.

The inventory at the current pace of sales stood at a 5.1-month supply at the end of March; and, according to the association, a balance market is believed to hover between a five-month and a 60-month supply.  The 5.1-month supply is down from a 10.2-month supply in March 2008.

“Higher sales, slower price decline, dwindling inventory — that sure sounds like the market has turned,” Link said.

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