Studio City remains the hottest spot in the Valley!

As sales of lower-cost foreclosure properties have waned over the past year, activity has picked up from very low levels in many high-end areas. Last month sales of homes priced at $500,000 or more made up 19.4 percent of all Southland transactions, compared with 18.5 percent in February and 14.9 percent in March 2009. Over the past five years, $500,000-plus deals averaged 35 percent of monthly sales, while over the past 10 years they averaged 26 percent of all transactions.

Higher-end sales are still hampered by the troubled jumbo loan market, which has improved only modestly over the past year. Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 15.7 percent of last month’s purchase lending, up from 14.8 percent in February and from 10.5 percent in March 2009. However, before the credit crisis in the fall of 2007, jumbos accounted for 40 percent of the market.

Adjustable-rate mortgages (ARMs) haven’t come close to recovering from the credit crunch, either. While 44.6 percent of all Southland purchase mortgages since 2000 have been ARMs, last month they represented just 4.8 percent, up from 4.0 percent in February and 2.1 percent in March last year(2009).

Year over year, the latest data for the month of February, indicates that the average price per square foot in Studio City is up 12.4%. There are currently 105 active listings in our neighborhood and this number is down by 50%, which is very bullish for the Sellers. Number of homes that are pending sale have also increased to 57, up 50% from a year ago, which is another bullish sign for our housing market. Going forward this trend may not last, as we hear that the lenders are ready to unload their inventory of foreclosed homes on the market. I believe that our market won’t be affected by the foreclosed homes, however the story in 2010 will be all about short-sales, short-sales and more short-sales. The lenders have realized that it is less costly to approve a short sale, and consumers know that there will be less damage to their credit if they choose to short-sale their property. Number of short-sales listing should increase for the next 12 months, and that might put a damper on property values. 

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