August home sales take a dive

first_imgVAN NUYS – Home sales plunged across the San Fernando and Santa Clarita valleys during August as lending sector turmoil continued to roil the markets, a trade association said Monday. Sales in the San Fernando Valley fell an annual 33.1 percent to 552 transactions, the lowest total for an August since record keeping began in 1984, said the Van Nuys-based Southland Regional Association of Realtors. That’s the third lowest sales total this year. However, the median price increased an annual 5.7 percent, or $35,000, to $645,000. The increase in the median price, the point at which half the homes sold for more and half for less, reflects more sales at the higher-priced end of the market, said Jim Link, the association’s executive vice president. In the smaller condominium market sales plunged 40.7 percent to 188 transactions and the median price slipped 2.8 percent to $389,000. During August the inventory built to a 10.4-month supply, the first time it broke into double digits since September 1995. The record is a 23-month supply in February 1993. That’s the amount of time it takes to deplete the inventory at the current sales pace. In the Santa Clarita Valley, sales fell an annual 25.6 percent in August to 186 transactions, traditionally a busy month. The median price of a single-family home, which peaked in April 2006 at $643,000, fell an annual 8.9 percent to $560,000 in August. Santa Clarita condominium sales also plummeted, down 40.6 percent from a year ago. The median price dipped an annual 2.2 percent to $362,000 and is off from the $397,000 peak in January 2006. During the boom that has tapered over the past 18 months, real estate agents complained the market was frantic as buyers paid top dollar for the low inventory of homes available. However, that inventory has climbed from less than a one-month supply then to a 10.2-month supply, well above the five to six months deemed optimal160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! “I think the sales slide is definitely attributed to the uncertainty in the lending market,” he said. “Until this lending thing shakes out we’re in for some tough times.” That’s because subprime loans have all but disappeared and the Valley median price is so high that potential buyers don’t have access to Fannie Mae and Freddie Mac backed loans capped at $417,000, or the conforming limit. And credit standards have been tightened. “It’s killing sales in the lower end of the market,” said Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge. Blake said that asking prices in some areas of the Valley are now 10 percent under what homes sold for a year ago. last_img