Home sales in Southern California's San Fernando Valley tanked in 2014, falling 7 percent from a year earlier to a record low in response to rising prices and scant inventory, according to the Realtors trade association.
But sales did pop up in December which could bode well for this year, said the Van Nuys-based Southland Regional Association of Realtors.
Last year association members sold 5,643 previously owned homes, down from 6,064 in 2013. Home sales have now fallen or been flat for five consecutive years, and the 2014 tally is the lowest since record keeping began in 1985.
“Traditional buyers and sellers stood on the sidelines while distressed sales worked their way through the market, and price increases gave owners additional equity,” association CEO Jim Link said in a statement. “Many consumers had been squeezed out by investors, but now there’s renewed optimism that those buyers and sellers will jump back into the market, leading to a gradual rise in inventory and additional resale activity.”
The full year median price rose 9 percent from 2013 to $518,833. It was the third consecutive yearly increase but well under the 24 percent jump from 2012 to 2013, a time when investors were clearing out the last of the distressed properties that flooded the market during the Great Recession.
The median price has now been above $500,000 every month since last March, but increases from the prior year are now in single digits.
“We weathered the storm of distressed sales and investors bidding up prices,” Link said. “Now the market has calmed down. We expect an increase in sales in 2015, especially now that regulators are relaxing overly tight underwriting standards and consumers have growing confidence in the economy and their financial future.”
Sales of condominiums fell 20 percent from 2013 to 1,983 units last year, the association said. For all of 2014 the condominium median price averaged $319,667, up 5 percent from the prior year.
The market did show signs of life in December.
Home sales increased 3 percent from a year earlier to 522 properties, and they jumped 24 percent from November. The median price increased 10 percent from a year ago to $521,000, but it lost $15,000 from November.
Condominium sales fell 16 percent from the year ago to 174 units but increased 13 percent from November. The condominium medium price increased 6.5 percent from the prior year to $330,000, and it gained $5,000 from November.
The inventory of all properties for sale at the end of December increased 14 percent from a year ago to 1,390. That is a two-month supply at the current sales pace. A six-month supply is needed so that neither the buyer or seller has the upper hand in a deal.
The Realtors track the market from roughly Toluca Lake to Calabasas.
A report from the San Fernando Valley Economic Research Center at Cal State Northridge shows a similar trend.
Both also note that distressed properties are no longer a factor in the market and foreclosures are at pre-recession levels.
The center tabulates sales of new and previously owned houses and condominiums from Glendale through Calabasas.
For all of last year, sales fell 11 percent from 2013 to 15,058.
William W. Roberts, the center’s director, is optimistic that the market will improve as this year unfolds.
“I’m hoping for a little bit better number than last year,” Roberts said. “The economy is improving but I think the market will be sluggish through March, and then it will pick up and probably get better.”
But he doesn’t think that sales will approach the 17,202 transactions of 2012.
On a monthly basis his report shows sales fell 6 percent from a year ago to 1,246 in December. But they increased from 1,028 in November.
The median price of new and previously owed houses rose 6 percent from a year ago to $543,000 in December but dropped $4,000 from November.
Prices flattened out last year but are high enough to give buyers pause because they cannot find properties in the mid-$300,000 range that were on the market four years ago, Roberts said.
“The median is basically stuck at about $550,000. It’s been there for the last six months,” he said. “You are not going to get that deal anymore. Buyers think, I lost out so I will wait for (another price decline) to happen again and maybe I’ll get the same kind of a deal.’”
©2015 Daily News (Los Angeles). Distributed by Tribune Content Agency
