The San Fernando Valley (SFV) is the heart of Los Angeles. It is home to many communities, including Calabasas, Toluca Lake, Porter Ranch, North Hills, Granada Hills, Reseda, Chatsworth, Tarzana, and Woodland Hills.
Are you planning to invest in the San Fernando Valley real estate? If so, we believe that staying on top of the market trends is critical to making smarter investment decisions. This article, compiled by experts at Park Regency Realty - a leading real estate company in the San Fernando Valley - will share critical housing market trends specific to the region. Let us dive right in.
Current Happenings in the San Fernando Valley Real Estate Market
In March 2021, there were over 2000 properties for sale in the San Fernando Valley. The number of properties closing throughout the region in the same period was significantly low, primarily due to a lack of inventory. The pace of sales in the valley picked up in May, with 497 single-family homes and 174 condos being sold. Remember that May 2020 saw record lows for sales as COVID-19 took hold.
By the end of May, the price for single-family units in San Fernando Valley hit a record high of $945k, up by 26% from May 2020 and $10k higher than April 2021 record. The median price for condos was $540k, which represents an 18.4% year-over-year increase.
In August, the number of homes coming to the San Fernando Valley real estate market remained steady, although the total inventory was 13% lower than last year. The number of pending homes is relatively high, which most likely has to do with California reopening on June 15th and almost everyone embarked on planning holidays.
Reopening of schools translates into parents being more focused on their home-buying process. With the increased SFV real estate activity, it's pretty obvious that most homes put on the market in June and July are now pending.
Pending in real estate means that a home seller has accepted an offer from the buyer. Most pending homes close, but there exist possibilities of the deal collapsing should the seller change their mind.
San Fernando Housing Market and Real Estate Price Forecast, Short-Term Property Price Prognosis for Next Months and Year
Short-term real estate market and home value forecast is based on last 5 years median home prices.
The Home-Buying Frenzy in San Fernando Valley is Cooling Off – Here's Why
In August 2021, home prices in the San Fernando Valley were essentially flat compared to July as the market cooled from four consecutive months of home buying frenzy.
Thanks to the market buzz, the median home price for 2021 will be almost 21% higher, and sales will see an 8% increase compared to last year. In August, the region's median sales price was $680,000, 13.9% above the August 2020 figure. By the end of the year, the median price of a single-family is expected to be $796k, up by $136k from last year.
We can attribute the buying frenzy during the first half of 2021 to the record-low mortgage rate, desire for more space, and a drop in housing inventory. In June, over 55% of homes sold above their list prices, with a typical unit going pending in just 14 days, compared to 39 days in 2020.
However, the market is normalizing! Listings are growing as more homeowners realize they will not fetch their desired prices by waiting longer. This, combined with slowed-down home buying, translates into more typical home prices and sales growth.
Are Homes Taking Too Long to Sell in the San Fernando Valley?
The summer holiday is over, and kids are back in school. Now, parents have more time to focus on turning their dream home into a reality. Referring back to the past few months, a home in San Fernando could receive 15-20 offers and sell in days.
However, in the fourth quarter, a similar property receives 2-3 offers and takes one to three weeks to sell. The likely reason is that more buyers have been priced owing to the relatively higher prices associated with the housing market frenzy we witnessed in the last few months. We can also attribute this trend to the lack of motivation among buyers whose offers were rejected during the frenzy.
Regardless, the San Fernando Valley real estate is still quite a seller's market. Prices are relatively high, and buyers are more qualified. As a seller, you must be prepared to take longer to sell your home.
What Comes Under $900K in the San Fernando Valley Housing Market?
What does $900k get you in the SFV real estate? It depends on which part of SFV you are considering.
In one location, $900,0000 can get you a two-story Mediterranean unit sitting on a 0.4-acre lot. You can expect features like a resort-style swimming pool surrounded by palms and mature landscaping, a fire pit, a center-island kitchen, six bathrooms, and six bedrooms.
However, some pricier locations offer a little less. We are talking about a 1930s bungalow with hardwood flooring, two bedrooms, one bathroom, coved ceiling, and sitting on a barely 1100 square feet lot.
San Fernando Valley MLS Listings
If you are thinking of dipping your toes into Southern California real estate, San Fernando Valley is a must-have in your investment portfolio. Based on the current home median price data, the San Fernando Valley real estate prices have been in the bullish cycle for several months, with predictions pointing towards a positive trend in the future.
Like any other market, real estate follows supply and demand. Supply is the size of housing inventory available, and demand is the number of people looking for properties for sale. Housing demand is primarily influenced by the economy, which is doing relatively well today. Still, the incredibly low mortgage interest rates are underpinning home buying. This demonstrates the typical inverse relationship between mortgage rates and demand for homes.
On the other hand, the current housing supply in San Fernando is low, marked by 65% less inventory than last year. That means there are more buyers than homes available for sale. As such, you expect home prices to be high. We expect an increase in inventory levels and interest rates in the future. But that does not necessarily mean that San Fernando Valley real estate prices will drop. It may take time to seal the gap between supply and demand, which means prices will continue to rise throughout 2021 and for the next years 2021-2027.