Local Realtor Assn. Whistles a Happy Tune

This week's Realtor Report from the Southland Regional Assn. of Realtors has a couple of articles about this past year's sales activity in the San Fernando and Santa Clarita Valleys that contained some interesting quotes from association officers.

San Fernando Valley

Members of the SRAR negotiated the sale of 9,832 single family homes and 3,658 condominiums during 2006, the Association reported. The SFR sales represented a 24.7% decline in sales from the 2005 figure. Likewise, condo sales were off 23.5% 2005 figures.

Despite the decrease in unit sales, the median price of a single family residence rose 6.4% to a record high of $605,917, and the median price of a condo rose 8.5% to a record $394,917.

According to Realtor Report, "The fact that prices not only held firm, but showed modest gains during a period of slowing sales refutes claims that the residential resale market is in recession. That, Realtors said, is good news for buyers, sellers, and the local economy."

Winnie Davis, the 2007 president of SRAR went on to say, "The price of homes in the San Fernando Valley during 2006 hit a point where buyers finally said, 'Enough. No More.' and that's a good thing. Buyers simply refused to continue engaging in bidding wars with multiple contenders who were scratching over an extremely limited inventory. Now the market is working its way through a readjustment period."

Davis continued, "Sellers must post realistic asking prices and buyers finally have a wider selection and more options, but savvy buyers know not to expect deep discounts. Realtors must really educate buyers and sellers about the realities of this new, balanced market."

The Realtor Report opined "In fact, unlike some parts of the country where prices also rose too high too fast, no one is predicting a major downturn in the local market or a collapse in prices."

In fact, the SRAR website contains a poll of local Realtors on their view of the next year in housing. Nearly a clear majority at 45% predict that 2007 will be worse than 2006, while 37% predict that it will be better. The balance think it will be about the same.

Santa Clarita Valley

Realtors sold a total of 3,746 homes in Santa Clarita in 2006, according to Realtor Report, with 2,531 single family residences with the difference in condominiums. This was 32.1% off the SFR pace in 2005 and 29.6% off the condo number of 2005. Like the San Fernando Valley statistics, the median prices rose nearly 7% over the year for both SFRs and condos.

According to Larry Gasinski, the 2007 president of the Santa Clarita division of SRAR, "Sales are slowing down not for a lack of demand, but because prices increased too high too fast. More buyers are coming out now as they realize that the feeding frenzy is over, the selection is wider, interest rates are still near historical lows and that sellers are setting realistic prices and are open to negotiation."

Jim Link, the Association's executive vice president, believes the market readjustment is nearly over and that activity will increase in coming weeks and months, according to the article. "Only a few sellers still cling to the false expectation of a 25% return and only a few buyers incorrectly think they can get steep discounts," Link said. "Everyone else understands that while the sellers market is over, what we have today is a balanced market that, even with a larger ino way suddenly puts buyers in control."

There was a total of 1,919 active listing in the SCV at the end of December, up 81.2% from a year ago, but off 12.1% from the November tally. At the current pace of sales, that represents a 6.9 month inventory, only slightly above the 5 or 6 month range regarded as a balanced market, but not large enough to sway negotiating leverage to buyers. At the peak of the sellers' market the inventory often was near zero or less than a one month supply.

"Properly priced homes are selling," Gasinski said. "Frankly, getting back to a normal market is a wonderful thing for everyone."