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Condo sales break recessionary lows

Home prices are up but home sales slow in August

Posted: September 24, 2013 6:17 p.m.
Updated: September 24, 2013 6:17 p.m.

SANTA CLARITA - August home sale figures in the Santa Clarita Valley reflected an ongoing recovery in the real estate market — but with two twists, according to numbers released Tuesday by the Southland Regional Association of Realtors.

First, condominium sales in August showed their strongest recovery to date and were the highest since April 2006. In both those months 129 condos sold. By contrast, only 59 condos sold in January of this year.

Prices followed. The median condo price of $295,000 represented an $118,500 increase over August of 2012 – up 67.1 percent from a year ago.

That was the “highest (sales) figure since May 2008,” the association reported.

“As prices rise and with last month’s slight uptick in interest rates, buyers focused heavily on properly priced, entry-level properties,” said Bob Khalsa, president of the SCV division of SRAR. “That’s one reason why condo sales picked up during August.”

Single-family home median prices also rose once again to $450,000 – the highest sales price since August of 2008, which was also $450,000

The median price marks the sixth consecutive month that median prices exceeded the $400,000 benchmark this year, said an association spokesman.

The single-family median price was up 20 percent over August 2012 and 4.7 percent higher than this July. That figure is also up 32.4 percent from the record low set in November 2011 when median prices hit an all time low of $340,000 during the housing crash, the association reported.

Also, a second set of trend-bucking numbers was recorded in August.

Years of declining inventory depressed home sales but helped to improve median prices. Listings, however, increased 18.3 percent during August yet the number of single-family homes sold actually declined.

A year ago 200 homes sold in August. In July of this year, 221 homes sold. By August, however, sales dropped to 176 homes.

Locally, Realtors cited a number of reasons for the August decline in home sales including the unusual combination of heat and humidity - which drove people indoors seeking air conditioning rather than shopping for homes, to rising mortgage rates, and children returning to school.

Also, the feds threatening not to buy bonds and securities and the crisis with Syria could be putting a damper on home sales, said one Realtor.

“Although inventory has risen, there are certain price ranges where inventory is still low and you still have multiple offers,” said Erika Kauzlarich-Bird with Triple D Realty.

Inventory is at a 1.7 month supply, according to SRAR. A balanced market – in which neither the buyer nor seller has the advantage – needs to be at six months the group said.

“The uncertainty surrounding interest rates, and interest rates adjusting slightly higher, actually caused some concern for buyers and it even put some buyers on the sidelines due to their qualifying was now in jeopardy for those who had borderline debt ratios,” said Kathy Salisbury with Triple D Realty.

Also, as prices continue to rise, investors are backing out of the market leading to lower sales, said Connor MacIvor with RE/MAX.

“I have seen a lot of investor pull-back due to the rising housing prices in the SCV cities,” MacIvor said. “The prices have outweighed being able to justify their investments after penciling out the numbers.”

That switch puts owner-occupant buyers back in the “pole position” with regards to securing homes they make offers on, he said.

Also adding to the growing inventory pool are people who want trade-up to a larger home, or downsize from their current home, said Robert Mickalson with Realty Executives Valencia.

But, the drop in single-family home sales is just temporary; the market is shifting again, Mickalson said.

“I believe that the number of single family homes sales will increase from the August low as more and more buyers pick up on the fact that they now have more choices than they did in May 2013,” he said. “And sellers might be more willing to negotiate their price due to the increased inventory they must compete with.”

As the number of homes on the market remains low, it will probably result in double digit price rises in the next several years, Salisbury said.

“Interest rates are low enough that buyers have to realize they are saving in the long run with more going towards principle with these rates than when interest rates were 6 and 7 percent, so it’s win-win for everyone in Santa Clarita,” she said.



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