Single-family home and condominium sales posted strong numbers during February even as the inventory of properties listed for sale throughout the San Fernando Valley hit a record low, the Southland Regional Association of Realtors reported Friday.
A mere 629 properties were on the market at the end of last month, down 20% from a year ago and the lowest number in the 34 years the association has kept the statistic, according to SRAR.
For perspective, the monthly listing average over more than three decades works out to 5,358 listings per month, which was a 5.6-month supply. But the 629 listings of February represented a 1.2-month supply at the current pace of sales and a shadow of the record-high monthly listing total of 14,976 posted in July 1992.
“That sales are up compared to a year ago is a tribute to the tenacity, the persistence, of buyers, sellers and the Realtors who navigated sales through COVID-19 rough times and a myriad of safety regulations,” said Diane Sydell, president of SRAR. “As pandemic health risks diminish further, we expect to see more buyers jump into the market and a modest increase in owners willing to list their properties for sale.”
Low interest rates and a desire for more space have “kept buyers motivated through the pandemic. Rates have risen over the last several weeks, yet they remain extremely low by historical standards,” she said.
A total of 356 single-family homes changed owners last month, up 11.9% compared to February, which was at the onset of the pandemic. Condominium closed escrows, totaling 160 units, were 29% percent higher than a year ago.
“Strict safety protocols make selling a house as safe as possible,” said Tim Johnson, SRAR’s chief executive officer. “With new infections now heading toward pre-surge levels and more people getting vaccinated, the local real estate market is likely to get even busier in the weeks and months ahead.”
The market will continue favoring sellers, Sydell and Johnson said, which makes it important that buyers spend time getting prepared, making sure their finances are in order before jumping into the market.
“With multiple offers common, buyers must be ready to act quickly when they find a home they like, to make fast decisions,” Sydell said. “It helps if buyers limit or remove contingencies and, even more importantly, be ready to make all-cash or cash-equivalent offers. I know that’s difficult for many buyers, yet cash is king in a sellers’ market, especially when competing against multiple equally eager and equally qualified buyers.”
Homeowners also will have to be prepared before listing a home for sale. With homes selling typically under 30 days, owners may want to consider buying a home and, if necessary, borrowing money to pay two mortgages until their original home closes escrow. That approach can eliminate health concerns regarding the sale and ensures a speedy resolution.
The median price of homes sold in February came in at $846,000, up 14.3% from 12 months ago and only slightly below the record-high median of $852,000 set in August.
The 160 condominiums that changed owners last month had a median price — meaning half sold for more and half sold for less — of a record-high $519,000. That was up 15.3% from a year ago.
Resale prices have been rising steadily for years yet went on a tear last year as the pandemic and low rates brought more buyers into the market, which yielded bidding wars, according to SRAR.
Despite the record-low inventory, pending escrows, a measure of future sales activity, totaled 640 homes and condominiums. That was up 6% percent from a year ago.
SRAR is a local trade association with more than 10,300 members serving the San Fernando and Santa Clarita Valleys.