The housing market in Sherman Oaks continues to bump along the bottom with some months better than others.
“I think we hit the bottom last year, and then values came back by 5 percent,” said Matt Epstein, a real estate agent with Prudential California Realty in the Sherman Oaks/Studio City office. “Over the past six months or so, it has leveled off.”
Epstein said he expects that it will take a couple of more years before the housing market experiences a real recovery, because the banks still have an inventory of distressed houses.
“The biggest drain on every community right now is short sales and bank-owned foreclosures,” Epstein said. “There is not any community immune to it. Even Beverly Hills has its share. It will be a factor for the next couple of years.”
It has, however, had more of an impact in the communities north of Sherman Oaks, such as Van Nuys and the central Valley, where houses are down 50 to 60 percent from the market peak in pricing, he said.
“The activity in Sherman Oaks is still strong, because of the schools and the location close to the Westside and the studios,” Epstein said. “Overall, Sherman Oaks has experienced a 25 percent to 30 percent devaluation [off the market peak in 2007]," he said.
Home sales throughout the San Fernando Valley picked up in March from February, yet remained behind figures from a year ago, according to the most recent data available from the San Fernando Valley Regional Association of Realtors.
A total of 544 single-family homes closed escrow in March, down 8.4 percent from March 2010, yet 41.3 percent ahead of the February report, according to the local trade association. Condominium sales of 215 units were up 1.9 percent from March 2010 and up 39.6 percent compared to February, the report stated.
Part of last year’s increase in sales activity can be attributed to the federal and state tax credit programs available to home buyers, which have expired.
“The tax credits created increased sales for several months,” said Jeffrey Kahn, a board member with the Southland Regional Association of Realtors. “We had a good boom in the months leading up to the tax credit, because a lot of people jumped in and bought properties.”
The housing market has slowed now that there isn’t anything artificially increasing sales, Kahn said.
But while the tax credits helped the overall residential real estate market, Epstein said it did not have as much impact on the Sherman Oaks market, because it is a higher-end market. Despite the continued economic malaise, Epstein maintains that the Sherman Oaks housing market remains a strong one.
He put the median price for a home selling in Sherman Oaks in the $700,000 to $800,000 range south of the 101 Freeway and in the $600,000 to $700,000 range north of the 101 Freeway.
This median speaks to a vast gap between homes at the top and bottom of the range. Last year, the highest priced house that Epstein sold went for $6 million, and the lowest priced house went for $400,000.
Home buyers who are looking for homes selling for $750,000 in Sherman Oaks are having a hard time finding them, he noted.
“It is interesting that the inventory of good homes at median prices is low,” Epstein said.
The realtor has a few different theories on why that might be.
“The reason is, the banks are not releasing a lot of homes and they are making the short-sale process cumbersome," Epstein said. "And people, who still have equity in their homes, are not being realistic about where prices are at. They are hoping the prices will go up so they can put the house on the market for more than they are worth.”
Pending escrows—a measure of future resale activity—suggest the market will remain soft even as the spring home-buying season gets under way, according to the realtors association.
A total of 1,076 open escrows were reported at the end of March, down 15.4 percent from the 1,272 pending in March 2010. Condo and single-family home sales typically dip in February only to gradually rise until peaking for the year in June or July, the report states.