While the Southland Association of Realtors (SRAR) recently found median home prices in the San Fernando Valley have hit a temporary plateau; declining supply, high demand and recent month-over-month price growth indicate new price peaks may be reached in the valley come this summer.
“Demand for homes and condos definitely is high,” said Jim Link, CEO of SRAR. “The wall buyers are running into is the scarcity of homes or condos listed for sale.”
Entering February there were a total of 1,262 active listings in the valley, 941 of which were single-family homes. This total equates to 2.8 months of supply. During the same time last year the total number of active listings sat at 1,453, which represented 3.3 months of inventory.
Home prices holding since summer
Declining supply amid high demand recently pushed single family and condos prices up during a period, December to January, where a dip in values is common.
According to SRAR data, the median price of a single-family home rose on a month-over-month basis by 0.9 percent to $569,900. At the same time the median price of a condo rose by 1.3 percent month-over-month to $362,500.
While these percentages only represent month-over-month price upticks of $5,129 and $4,712, respectively, they are significant enough to drive median values to new peaks if they continue during the next four to six months.
The primary reason: median prices have not dipped significantly since peaking last summer.
In the single-family sector, median values peaked in July when they reached $600,000. They have since dropped by roughly $30,000; however at $569,000 January’s median price represented the third highest monthly value in the past 13 months.
Condo values have performed better, only declining by $7,500 since prices peaked at $370,000 this past August.
Prices possibly reaching a new peak should definitely impact sales activity. The impact of pricing should be fully recognizable come March, as this is when buying activity historically picks up in the valley.
In January there were 337 single-family resales, which equated to a 9.8 percent year-over-year gain in activity.
In the condo sector there were 118 sales, which represented a year-over-year decline of 11.3 percent. The condo sales tally was the lowest monthly sales total since at least February 2008.
