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Bob Khalsa: Statewide median home price at five-year high

Posted: April 25, 2013 2:00 a.m.
Updated: April 25, 2013 2:00 a.m.

Bob Khalsa

 

Heated market conditions fueled by a tight inventory and strong sales in higher-cost coastal regions drove California’s median home price in March to its highest level since May 2008. Local prices, right here in the Santa Clarita Valley are headed higher, too.

Home sales statewide declined moderately from last year as an extreme shortage of available homes continued to dictate the market. Statewide inventory dropped 36 percent from last March and was below 3 months for the second time in the past few months. Supply conditions are particularly tight in the lower-priced segment of the market, as inventory for homes priced below $300,000 plunged more than 50 percent from the previous year.

Homes listed for sale in all prices in Santa Clarita dropped 56.9 percent compared to a year ago and continue to hover at near record-low levels.

Despite the low inventory, local home sales increased 11.1 percent in March while condominium resales rose 41.8 percent.

We should consider ourselves lucky, because closed escrow sales of existing, single-family detached homes throughout California during March were down 4.9 percent from March 2012.

With demand heavy and supply tight, the statewide median price of an existing, single-family detached home climbed 13.7 percent from February’s $333,380 median price to $378,960 in March, reversing a two-month decline.

The month-to-month increase was the highest since the California Association of Realtors began tracking this statistic in 1979. The March price was up 28.2 percent from $295,630 recorded in March 2012, marking the 13th consecutive month of annual price increases and the ninth consecutive month of double-digit annual gains.

There’s no question in my mind that the dearth of home listings is driving the upsurge in the median price, combined with the increase in sales in the higher-priced homes.

Sales of homes priced $500,000 and higher are up more than 34 percent from last year, and have been on a rising trend since early 2012. Sales growth in the coastal regions – Marin, Orange, San Diego, and San Luis Obispo, in particular – helped push the statewide median price up to the highest level in more than four years.

The median price of Santa Clarita Valley homes of $420,000 was up 11.1 percent from a year ago. While still down 34.7 percent from the peak of the boom market, the local median has increased 23.5 percent from the bottom of the crushing recession. The last time we saw a $420,000 median price was in July 2010, but we’d have to go back to 2008 or earlier to find a price that was consistently higher.

Interest rates are expected to stay low, but they have been fluctuating up and down over the last several months, which should be a warning of things to come and a motivation for buyers who like to wait until rates are marching higher. Mortgage rates edged up in March, with the 30-year fixed-rate mortgage averaging 3.57 percent, up from 3.53 percent in February, but down from 3.95 percent in March 2012, according to Freddie Mac.

Homes continued to move off the market faster in March, with the median number of days it took to sell a single-family home decreasing to 29.4 days in March, down from 34.2 days in February and down from 52.2 days for the same period a year ago.

All in all, it sure looks like the housing recovery is gathering momentum.

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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