For the second month this year, May posted a record median home price while the inventory of homes for sale rose on a year-to-year basis for the first time in more than three years, the Southland Regional Association of REALTORS® reported on Thursday, June 21.
With prices on the rise and inventory tight, sales of homes and condominiums during May in the San Fernando Valley fell from year ago levels, though posted seasonal increases on a month-to-month basis.
The 497 single-family homes and 188 condominiums that closed escrow were down 10.6 percent and 7.4 percent, respectively.
The root cause of sluggish sales activity locally and in much of the country continues to be the utter lack of available listings on the market to meet the strong demand for buying a home.
“Realtors see that the healthy economy and job market are keeping buyers in the market for now though they face rising mortgage rates,” said Gary Washburn, president of the 10,300-member Southland Regional Association of REALTORS®.
“However, even with the slight uptick in active listings in May, inventory shortages are worse than in recent years,” he said, “and home prices keep climbing above what many home shoppers are able to afford.”
There were 1,303 active combined residential listings at the end of May, an increase of 6.3 percent from a year ago. It was the highest number of listings since November 2016 and the first year-to-year gain after 39 months of consecutive declines.
Even with the increase, the active inventory represented a 1.9-month supply at the current pace of sales, though that too is up from the 1.6-month supply posted a year ago.
“The record home price is consistent with the overall statewide trend,” said Tim Johnson, the Association’s chief executive officer. “And, it is consistent with the tight inventory leading into May.
“Let’s hope the increase in listings is a sign that prices in the second half of the year may increase more slowly or even stabilize slightly, especially when you consider that rates will likely be higher and affect what buyers can afford.
The median price of single-family homes sold during May rose to a record $708,000, up 11.3 percent from a year ago. It surpassed the prior record of $700,000 set this February.
The median price of condominiums that changed owners in May was $420,000, up 0.2 percent from a year ago, but off 3.4 percent from the April median price which set a record high at $435,000.
Of the 685 homes and condos sold during May, 96.2 percent were standard sales involving traditional buyers and sellers. There were five foreclosure-related sales, for a 0.7 percent share of the local market, and six short sales, for a 0.9 percent share.
The Southland Regional Association of REALTORS® is a local trade association with more than 10,300 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.