The median price of single-family homes that closed escrow during February in the San Fernando Valley rose to another record high and sales were limited by an extremely tight inventory of properties listed for sale, the Southland Regional Association of REALTORS® reported on Friday, March 23.
The median price hit a record high $700,000, an increase of 16.7 percent over a year ago and surpassed the prior high of $675,000 set in November. February marked the third time the local single-family median price has hit new highs, beginning in March 2017 when prices surpassed the record that had stood since the boom market of last decade.
The February condominium median price of $410,000 was up 2.8 percent from a year ago. It surpassed the $400,000 benchmark for the eighth consecutive month, including the record high $430,000 set in December.
“With each increase in home resale prices the pool of buyers shrinks,” said Gary Washburn, president of the Southland Regional Association of REALTORS®. “And with so few properties listed for sale, we’re once again seeing stiff competition with offers coming from multiple buyers on most listings, especially if priced under $500,000.
“What the market really needs is more inventory, a major infusion of homes listed for sale,” Washburn said.
After setting a record low in December with 819 active listings — the first time the inventory fell below the 1,000-benchmark active listings for any month since recordkeeping began in 1986 — the tally improved slightly in January and February with 918 and 958 active listings, respectively.
Yet February marked the third consecutive month below 1,000 listings with the 958 combined residential listings reported in February off 13.1 percent from a year ago and representing a mere 2.2-month supply at the current pace of sales.
For perspective, the record-high inventory for any month on record was 14,976 in July 1992. Last decade, the high came in October 2007 with 7,730 active listings, which was a 16-month supply at the then current pace of sales as the bottom fell out of the housing market and the economy went into free-fall.
“Just as today’s rising interest rates prompt prospective buyers to take action, owners locked into yesterday’s historically low rates appear to be hesitant to list their home for sale,” said Tim Johnson, the Association’s chief executive officer.
“Those are just two of a raft of competing forces that hinder an increase in home sales,” Johnson said. “The demand for housing is fierce enough to prompt multiple offers, yet the supply so woefully inadequate that the resulting higher prices, which no doubt benefit sellers, actually seem to make the market ever more complicated.
“With interest rates likely to move higher throughout the year, buyers will be even more eager for a home of their own,” he said, “yet local owners seem unlikely to change course, even with the lure of the highest resale prices ever.”
Realtors helped close 309 single-family home closed escrows during February. That was down 3.7 percent from a year ago and off 9.4 percent from January. Condominium sales of 125 units were off 15.0 percent from February 2017 and 14.4 percent lower than January.
Given today’s sky-high prices, distressed sales have virtually vanished. Of the 434 combined home and condominium sales, 95.9 percent were standard sales involving a traditional buyer and seller. There were seven foreclosure-related sales in the San Fernando Valley, for a 1.6 percent share of the local market, and three — or 0.7 percent of the market — short sales, where the lender agrees to a purchase price less than the outstanding loan balance.