Hope in the Valley? Home prices up slightly

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Could it be the bounce in market activity that many of you have predicted? And if it is, what does it mean?

News item: Median sales prices for existing homes in the San Fernando Valley rose by 5% from January to February, and the number of single-family home sales also showed a slight increase, according to the Southland Regional Association of Realtors.

Not necessarily a full-fledged bounce, but a sign of life. More numbers: The median sales price for existing single-family homes jumped from $500,000 in January to $525,000 in February. That’s still a decline of 13.9% over the past year, but it’s the first month-to-month increase since August.

The number of closed escrows rose slightly, from 323 in January to 358 in February. That’s still a decline of 31.9% from year-ago February levels, but it is an improvement from the annual declines registered in December (51.6%) and January (43.2%).

So, is this a sign the market is beginning to hit bottom, or a false bottom/head fake/bear trap/dead cat bounce? Your comments shortly, but first analysis from Jim Link of SRAR: ‘If you’re a real estate optimist, you’d say we hit bottom and this is the turn. I’d say the numbers indicate we are either at or near the bottom. I don’t think we’re going to see a major increase in activity and I don’t think we’re going to see major increases in prices, but I think we are at a point where we’re going to see more transactions as buyers take advantage of prices that are at levels we haven’t seen in the past few years, and historically low interest rates.’

Two other insights from Link: His recollection of previous downturns is that market activity usually increases before prices hit bottom. He also points out that one cause of extreme sluggishness in the market is the snail’s pace at which foreclosed houses are being sold -- not necessarily because they are poorly priced, but because the administrative process of selling foreclosed houses is more complicated than in the past, and banks and lenders have yet to streamline it.

Now, your thoughts and comments. E-mail story tips to peter.viles@latimes.com.