Single-family home sale prices have increased this year, according to the Southland Regional Association of Realtors’ yearly market snapshot.
The median sale price of a single-family home, which is currently reported as $625,000, has increased by 11.6% from this time last year, per the report.
“The median sales price is an indication of what properties are selling and takes into effect whether (homes with) higher price sales (are selling more),” said Michael Regilio, of The Regilio Group and RE/MAX of Santa Clarita and board member of the SRAR.
The data shows that the number of transactions in a higher price range is going up, which then creates a higher median.
Bob Khalsa, owner of United America Realty in Newhall and board member of the Southland Regional Association of Realtors, attributes this increase to the limited supply of new housing, and Regilio agreed.
“There’s just a smattering of new units that have come into the pools,” Khalsa noted.
Overall, especially when compared to the surrounding L.A. County, this median remains low.
“When you think $625,000 it’s crazy, but compare it to just going over the hill to Granada Hills, the average sales price is much higher with less quality or amenities,” Regilio said.
Even so, the SCV still has room to grow when it comes to price increases, which experts are predicting, according to Regilio.
“The expectation for 2019 was that we were going to decline in number of closed transactions; but it’s weird, because we’ve actually had a pretty decent year,” he added.
While the number of active listings is down by 37.5% from the previous year in November, that doesn’t mean that there are less total transactions, as pending transactions are up 8.3%, meaning that homes are simply going into escrow faster, Regilio said, referring to the report.
In fact, the total dollar value of year-to-date sales increased $34,087,000 from this time last year, according to the snapshot.
Overall this year, we’ve seen more home sales and a more consistent market. “In May, we were behind last year, and it wasn’t until September that we had more closed sales year to date. All of a sudden that positive number incrementally grew, and now, closed sales are up 2.9%.”
Next year, Regilio believes that expectations will again be exceeded as the economy is extremely strong, especially in Santa Clarita because of a number of new jobs hitting the market when many of the commercial developments are completed.
“This will give us more opportunity to have stable income, which is a huge factor in real estate prices,” Regilio said. “A stable job market allowing people the comfort to afford a home.”
The limited housing supply is ultimately what would hold the market back, as there are not many new housing developments coming in the near future, according to both Regilio and Khalsa.
Rise in condo sales
The residential real estate market in the Santa Clarita during November went against seasonal trends thanks in part to a 4.5% rise in condominium sales, according to SRAR reports.
The lowest interest rates on home loans in three years brought buyers out at a time of year when activity typically tapers, Realtors noted. “That yielded 70 sales of local condominiums and 176 single-family home sales, which were off 6.4% compared to November 2018,” according to an SRAR news release
“As of mid-October, obtaining an FHA-backed loan got a little easier, which may have translated into the bump in condo sales,” said Amanda Etcheverry, 2019 chair of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. “The new condo rules, among several significant changes, made it possible for individual condominiums to obtain loan approval even if the condo association was not FHA-approved.”
“I truly believe there would have been more sales of homes and condos if only the inventory had been larger,” she said. For comparison, the record low listing total was 312 listings in March 2013 while the record high of 2,630 listings was reported in September 2006, the SRAR reported. At the current pace of sales, the 377 listings represented a 1.5-month supply. The average listing total reported over the past 11 years was a 4.1-month supply.
“Low interest rates help offset some of the impact of rising prices,” said Tim Johnson, CEO for the SRAR. “But Realtors believe more homes and rental units must be built or the affordability crisis will only worsen with each passing year.”
This could all change come this time next year, as we’re getting ready for an election cycle.
“It’s all about consumer confidence and business confidence,” Regilio said. “Consumer confidence drives residential housing while uncertainty slows the market down.”
Elections become that “x factor,” and can typically have an affect in the market.
“It all depends on how consumers react to the elections at the end of the year,” he said, adding, “but before that, I think we’ll have a stronger first quarter than this year, and barring any catastrophic event, we’ll have a pretty reasonable 2020 in the real estate market.” ν