While up from the low point of this economic recession, sales of existing single-family homes in the San Fernando Valley fell during July compared to a year ago as federal tax credits ended and the supply of homes listed for sale remained low, the Southland Regional Association of Realtors® reported.
A total of 589 homes changed owners last month, down 20.9 percent from 2009 and 9.2 percent below the pace set this June. While off 55.4 percent from this cycle’s high, the July total was up 82.4 percent from the record-low 323 sales of January 2008.
“Expiration of the federal tax credits had a huge impact on the sales numbers,” said Patti Petralia, president of the Southland Regional Association of Realtors. “With interest rates historically low and the affordability index at all-time highs, all indicators would point to improved sales activity. Of course, another tax credit would give a big boost to the market.
“The market has improved from its low point,” Petralia said, “but it hasn’t stabilized as much or as fast as we had hoped.”
Realtors also closed escrow during July on 216 condominium sales, an increase of 6.4 percent over a year ago, yet down 17.6 percent from this June. The July condo sales total was up 105.7 percent from its lowest point, which also came in January 2008.
“We’re hearing the same story throughout California,” said Jim Link, the Association’s chief executive officer. Foreclosures are down, short sales still play a major role, investor activity is heavy, traditional buyers are only slowly jumping in and too many lenders have yet to streamline their procedures.
“We would be guardedly optimistic,” Link said, “if it were the norm, not the exception, for lenders to have refined their systems so that they could, in an orderly, methodical way, approve or reject short sales in under 60 days.”
Link said some lenders have made good progress, yet too many borrowers still get lost in a paper-trail maze while too many lenders take too long to issue a final decision.
Petralia said “I do think most lenders are becoming more proactive and cooperating in the short sale process. With the help of a good negotiator, the approval time frames seem to be improving.”
The slow down in sales allowed the inventory to grow slightly during July, although it still remains well below levels needed to satisfy a market where multiple offers are common.
“Anyway you cut it,” Petralia said, “we still have a very low inventory overall.” There were 2,758 single-family active listings and 984 condo active listings, up 14.0 percent and 14.7 percent, respectively, from a year ago. The total inventory of 3,724 listings represented a 4.6-month supply at the current pace of sales. That’s an improvement from the 3.5-month supply of July 2009, yet still below the desired 5- to 6-month supply that would yield a balanced market.
With fewer sales, prices also softened during July. The median price of homes sold last month was $399,000, off less than 1 percent from a year ago. The condo median was off 3.5 percent. Nonetheless, both were up from this cycle’s low points: the single-family median was up 17.4 percent while the condo median was 15.8 percent above its record low.
Pending escrows - a measure of future activity - suggest the market will remain sluggish in the months ahead. The 1,086 open escrows were off 13.7 percent from a year ago - the opposite of what traditionally happens during what should be the busiest time of year for home sales.