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Home sales rise again, inventory shrinking

Posted: May 27, 2009 9:20 p.m.
Updated: May 28, 2009 4:55 a.m.
 

Santa Clarita Valley home-sales activity experienced another boost in April as home buyers pushed inventory numbers down. The 214 single-family homes sold in April marked the 13th consecutive month of sale increases, taking the rate to a 20-percent jump compared to April 2008, according to the Southland Regional Association of Realtors’ latest numbers. Realtors sold 38 more homes in April compared to March.

The median price of homes sold in April was $410,000, a 2.5-percent increase from March’s median price. There were a total of 412 open escrows at the end of April throughout the valley.

There were 1,110 homes for sale at the end of April, which is 44.4-percent lower than April 2008’s market inventory. That number represents a 4.1-month supply at the current pace of sales. The condominium median price was up $250,000 from $199,500 in March, which was the lowest median reported since Nov. 2002, according to the association’s information.

“There’s still a lot that needs to happen, but all the signs are positive,” said Nancy Starczyk, president of the Association’s Santa Clarita Valley Division, in a news release. “I haven’t seen such a low inventory of homes for sale and that’s because there are multiple buyers appearing on virtually every new listing.”

Starczyk said listings at or below median price are seeing multiple offers, with many offers coming above the list price.

The Association attributed increased sales to low interest rates, the return and ready availability of Federal Housing Administration, or FHA, financing, which comes with a low down-payment requirement, and an $8,000 tax credit via the federal housing stimulus package combined with favorable resale prices.

“With California’s high home prices, FHA financing was rarely used in the past, said Jim Link, the Association’s chief executive officer.

“But with affordability better than any time in recent memory, FHA financing is back and is now the preferred vehicle for financing the purchase of a home.”

A FHA-insured loan is designed to help first-time buyers purchase a home by offering a low interest rate, low monthly payments, a down payment of only 3.5 percent, less rigorous qualifying standards and a willingness to work with buyers who have a less than stellar credit history, according to David Walker, the association’s media manager.

While signs suggest the market is moving toward recovery, Link and Starczyk said full recovery will not arrive until financing for higher-priced homes becomes more available.

Starczyk said while more distressed properties are expected to hit the market in coming months as the state’s moratorium on foreclosures expires, she does not anticipate a flood that will overwhelm the market.

 

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