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Local home sales have turned the corner in the real estate recovery

But the number of SCV homes listed for sale has dropped to less than a one-month supply

Posted: January 30, 2013 2:00 a.m.
Updated: January 30, 2013 2:00 a.m.

Triple D Realty/Courtesy Photo

 

Santa Clarita Valley home sales increased 8.1 percent last year over 2011, marking the second consecutive year of annual gains and the highest annual sales total since 2006.

Despite the critically short existing home inventories plaguing the SCV and many markets nationwide, a total of 2,308 single-family homes changed owners last year, reported the Southland Regional Association of Realtors.

Experts say that home sales also generate other activity that contributes to the economic recovery in the form of purchasing power when buying home furnishings, appliances, services and construction and landscaping services.
And local 2012 transactions increased $100 million over the prior year.

Local Realtors negotiated a total of $1.1 billion in real estate transactions during 2012, SRAR reported.
Last year ended on a very strong note, a spokesman for the realty association said.

December sales recorded the highest monthly total in six years.

Home sales
There were 247 sales in December 2012 – up 13.8 percent over the same period in 2011, SRAR reported.

Sales of condominiums were just as strong, the association said. The sale of 1,026 condos marked an increase of 15.5 percent over 2011.

And 2012 condo sales, like existing home sales, also marked the best annual total in six years, the realty association reported.

In December alone, there were 120 condos that closed escrow – up 13. 8 percent over December 2011, SRAR reported.

Condo sales last month, however, jumped 47.9 percent from November sales making December condo sales the highest monthly total since 2006.

The trend, however, doesn’t necessarily note as much of an increase in home ownership by buyers who live in the homes they purchase, according to Bob Khalsa, the 2013 president of the association’s Santa Clarita Valley Division.

Investors
Khalsa said he’s witnessed up to a 30 percent increase in the rental market since 2008.

“When primary residence purchases show month-over-month increases, slow climb though it may be, we’ll get real stability in the housing market,” Khalsa said.

As for the small number of existing homes listed for sale on the market, Khalsa said the trend toward abysmally low active inventory numbers was foreseen and will be with us for some time to come.

“While sales of distressed properties, both foreclosures and short sales, are declining, the local market will regain stability when sales go to more buyers seeking primary residences and fewer to investors.”

The number of homes listed for sale dropped nearly 67 percent during December, marking the fifth consecutive monthly record low. It was also the fifth consecutive month with a drop compared to the prior year exceeding 60 percent, SRAR reported.

At the current pace of sales, the activity inventory represents a mere 0.9-month supply, which also was a record low. A balanced market, in which neither the buyer nor the seller has an advantage, has a 5- to 6-month inventory.

“Record-low inventory combined with years of pent-up demand in a highly desirable community like Santa Clarita inevitably trigger price increases and multiple offers,” said Jim Link, the association’s chief executive officer.

And while SCV Realtors began reporting bidding wars in early 2012, tight lending rules and a number of homeowners who are still underwater on their home loans kept prices from inflating too quickly, Link said.

Median prices
“Still, prices are slowly moving higher,” he said.

The median price of a single-family home throughout the wider SCV region was $403,500 in December, SRAR reported. That price reflects an 18.7 percent gain over the same period in 2011.

December’s median price regionally also tops the $400,000 figure for the first time since 2010.

Distressed condo sales are still keeping median prices depressed, however, the realty association reported. The annual median price of condos sold last year was $192,158, down 8.8 percent from 2011.

The housing recovery took hold in 2012, according to Khalsa and Link. Most analysts pinpointed February as the turning point.

Both SRAR executives expect 2013 to show continued improvement.
“The market is still wrestling with issues,” Khalsa said, “but the worst is past, with better days ahead.”

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