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Home resale market stalled in January

High percentage of short sales, delays in lending approval are keys in 7 percent drop from last year

Posted: February 26, 2010 10:25 p.m.
Updated: February 27, 2010 4:55 a.m.
 
The resale market stalled in January, with just 137 single-family homes closing escrow.

That's down almost 7 percent from last year.

"A tight inventory has plagued Santa Clarita for months," said Andrew Walter, president of the Southland Regional Association of Realtor's Santa Clarita Valley Division.

At the current sales pace, inventory represents a four-month supply, the report stated. A four- or five-month supply represents a balanced market; a year ago, the supply fell within that range.

Slowing the market are the high percentage of short sales and the delays in getting approvals from lenders, association officials said. A short sale is when the sale price of the home is less than the amount owed to the bank on the home.

"Even though some of the major banks are finally developing a fast-track system, the extended timeframe to successfully negotiate a short sale is seriously affecting average escrow periods," Walter said.

Lenders take more than 90 days to decide on a short sale. Usually, lenders take between 30 and 45 days to close escrow, Walter said.

Another factor stalling home sales was the first-time home buyer tax credit, which was set to expire in November but was then extended.

By the time the federal government announced it was extending the deadline to April 30, some buyers had already left the market and are only recently starting to jump back in, Walter said.

January's median home price was $399,900, up 1 percent from a year ago but down 4.2 percent from December.

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