San Fernando Valley Home Sales Down in July; Median Price Up

Ongoing turmoil within the home lending industry, tighter qualifying standards for home loans and the negative psychological impact both have on prospective home buyers squeezed the single-family home resale market in the San Fernando Valley during July, the Southland Regional Association of Realtors® reported.
A total of 61 7 single-family homes changed owners during July, down 23.7 percent from the 809 sales of a year ago and 10.6 percent lower than the June tally. Reflecting more activity in higher price ranges, the single-family median price of $630,000 was up 3.8 percent in July compared to a year ago. However, it was off 3.8 percent from the record-high of $655,000 that was set this June.
There are still plenty of loans available at decent interest rates, yet many lenders have raised their qualifying standards to a point where some buyers with solid credit history have difficulty getting a loan. It's also taking longer to get a loan approved and processed, which is slowing down the entire process. People who have solid credit, with good FICO scores, and have 10 percent or 20 percent down can readily find a favorable loan.
Realtors® also assisted in the sale last month of 276 condominiums. That total was down 12.9 percent from a year ago, but up 12.7 percent from the June total.
The median price of the 276 condos that changed owners last month was $407,500, up 1.9 percent from a year ago and from the June 2007 figure. The condo median has been hovering around the $400,000 market since the record high of $41 5,000 was set in February 2006.
Davis and Jim Link, the Association's executive vice president, agreed that reports of problems in the relatively small so-called sub-prime sector of the home loan industry has the biggest impact on first-time home buyers. The sub-prime market catered to buyers with a weak or flawed credit history and limited income.
Even some buyers with good credit and money for a down payment are sitting on the sidelines, hesitant to jump into the market because of the negative publicity and unfounded fears that prices may drop.
A total of 7,195 properties were listed on the Association's Multiple Listing Service, up 12.8 percent from a year ago and 5.4 percent higher than the total reported this June
At the current pace of sales, the inventory represents an 8.6-month supply, slightly higher than the 5-to 6-month inventory that represents a balanced market.