- Affordability issues and slowing sales activity are likely to negatively impact home prices moving forward.
- Multiple buyers are no longer competing for quality properties.
- Single-family homes account for roughly 70 percent of all listings in the submarket.
The San Fernando Valley submarket entered its seasonal slowdown in a much better position than a year ago.
According to the Southland Regional Association of Realtors, during October the median price of a single-family home was $562,000, up 7.9 percent year-over-year. Additionally, the 523 single-family homes that closed escrowed during the month equated to a 5.9 percent yearly jump in activity. The San Fernando Valley comprises the cities of Glendale, Burbank, San Fernando, Hidden Hills and Calabasas.
The area’s volume of pending sales (773), a measure of future sales activity, were also up at month’s end by 4.2 percent year-over-year.
This figure suggests activity will continue to be stronger than expected as the year draws to a close, SRAR stated.
However, declining month-to-month sales figures suggest otherwise.
The 523 homes that sold in October equate to a 10.1 percent month-to-month drop in activity. SRAR notes that the local resale market hit its peak in July when 603 homes closed escrow.
Declining sales activity has yet to halt price appreciation, as month-to-month the median home value rose by 1.3 percent to $562,000. This continued appreciation, combined with 2.3 months of supply, has the potential to further slow sales activity. Slowing sales activity could then halt price appreciation.
A tight inventory and higher resale prices make it difficult for some buyers to qualify for a home loan, even as interest rates remain low, according to Gaye Rainey, president of SRAR.
“There are fewer instances of multiple buyers competing for quality properties,” noted Jim Link, SRAR’s CEO.