Condominiums sold during May in the Santa Clarita Valley had a median price of $370,000, up 5.9 percent over a year ago and only the second time the median hit or exceeded that benchmark since the housing boom of the last decade, the Southland Regional Association of Realtors reported Thursday.
The condo median price for May also was 6.9 percent below the record high of $397,000 set in January 2006. Only the condo median price of $372,000 reported in September was higher than the May median.
“Affordability issues drive buyers to condominiums, which remain the best way to grab onto the first rung of the housing ownership ladder,” said Marty Kovacs, chairman of the Santa Clarita Valley Division of the Southland Regional Association of REALTORS®. “It’s the best, and in some cases the only, way to get into the market — start with what you can afford.”
Yet Kovacs acknowledged that rising prices driven in part by a severe lack of inventory deplete the pool of prospective buyers who can afford even a condominium.
“It’s very much like a holistic health problem,” Kovacs said. “You can’t cure the housing crisis by pointing to any single issue. It’s very complex. You have to treat a full range of concerns: affordability, income, property taxes, along with the stark lack of inventory.”
For example, Kovacs said, lending regulations tightened in the wake of the housing meltdown of last decade reduced the risk of defaults. Yet he believes it is more difficult to land a loan today than at any time since he purchased his first home in 1969.
“Let’s stop these disastrous regulatory swings from one extreme to the other,” he said, “and get it back to a middle ground that benefits homebuyers.”
REALTORS® helped close escrow on 107 condominium sales during May, up 5.9 percent from the prior year, and 246 single-family homes, down 2.4 percent from May 2016. Both condos and home sales were up from this April, posting seasonal month-to- month increases of 32.1 percent and 28.1 percent, respectively.
“It’s difficult to ease pressure on prices with so many buyers chasing so few properties listed for sale,” said Tim Johnson, the Association’s chief executive officer.
Johnson noted that there were 484 active listings at the end of May, which was down 4.3 percent from a year ago. That represents a mere 1.4-month inventory at the current pace of sales when a minimum 3-month supply is needed and a 5-month supply—the historical average—would be ideal.
The median price of single-family homes sold last month was $560,000. That was up 1.8 percent over a year ago and 0.9 percent ahead of this April. It was 12.9 percent below the record high of $643,000 set in April 2006 and the third time the median hit $560,00, including January and July. The highest home median price reported since last decade was $575,000, which came in June 2016.
Pending escrows—a measure of future sales activity— totaled 423 combined residential transactions, up 5.2 percent from a year ago.
Of the 353 combined home and condo transactions reported during May, 96.6 percent were standard sales, 1.7 percent were short sales, and 1.4 percent were foreclosure- related transactions, referred to as REOs. There were zero condominium REOs and only one condo short sale during May.
The Southland Regional Association of REALTORS® is a local trade association with more than 9,600 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.