After monthslong closures amid the coronavirus pandemic, the real estate market has begun to see the impacts of the shutdown, as the number of home and condo sales in the Santa Clarita Valley plunged in May.
A total of 111 single-family homes were sold in May, down 54.5% from last year, while the 55 condominiums sales were off 46.6% from 2019, according to reports released June 17 by the Southland Regional Association of Realtors.
While these figures are still above the record low of 99 home and 31 condo sales set in January 2008 during the Great Recession, SRAR member and SCV realtor Marc Leos says he believes these figures will continue to nosedive.
“The demand is there, don’t get me wrong,” Leos said, “but people aren’t ready to make such a large financial commitment right now with the turmoil. A few of my clients were house-hunting before the pandemic — now they’re on unemployment.”
Louisa Henry, chair of the SCV division of the SRAR, said she’s confident the industry will rebound because the need remains for many, despite the pandemic restrictions, and there isn’t a great supply for the area, which is very desirable.
“Realtors worked hard to help buyers and sellers close escrow on transactions that were in the pipeline when the shutdown orders came in mid-March,” Henry said in a prepared statement. “They are working even harder now to help get the market moving again.”
Even with restrictions changing the way the real estate industry does things, including transitioning to virtual showings and enhanced cleaning protocols, the demand remains, Henry said.
“The need for housing is even more intense than before the pandemic, though we’re still limited by a very low inventory,” Henry added.
By the end of May, a mere 426 listings were active to serve the entire SCV, down 32.4% from last year, per the report.
However, these figures were the highest tally in seven months, as December saw a record low listing total of 293.
Even though choices are slim, with near-record low mortgage rates, many potential home buyers are still trying to search for their perfect home, Leos added.
“These low mortgage rates are certainly going to continue driving the demand as we continue to reopen here in Santa Clarita, but we’re going to need to see a lot more listings or new construction to keep prices low,” Leos said.
That being said, home and condo prices have remained steady through the pandemic, even increasing in some areas.
The median price of single-family homes sold in May was $612,000, up 1.2% from 2019 though still below the record high of $643,000 in April 2006, while the condo median price of $425,000 was 9% higher than last year, setting a new record and breaking the prior record high of $420,000 reported both in August and October 2019, according to the SRAR report.
“When sales used to slow, the supply used to surge, with thousands of properties available to buyers,” Tim Johnson, SRAR chief executive officer, said in the statement. “And when supply surged, prices softened. But the market is fundamentally different today — neither a surge in supply nor a softening of prices appear to be happening, at least not yet.”
With the SRAR report showing 327 escrows opened during May, down only 13%, it appears the real estate market remains active. ν