Housing demand can’t keep up with supply

Buyers are hungry, sellers are scarce and conditions in the residential real estate market hardly resemble the spring of 2011.

Home prices are stabilizing and in some cases rising, according to agents who specialize in Pasadena, La Cañada Flintridge and surrounding cities, with only one problem: Demand is far outstripping supply.

In April, single-family homeowners listed 227 properties for sale in Pasadena, according to statistics from Keller Williams’ Glendale agent Keith Sorem. In April 2011, 386 Pasadena homes were on the market.

The number of listings has dwindled by a similar ratio in San Marino and La Cañada, and South Pasadena saw a startling drop from 57 listings in April 2011 to just 13 last month.

Real estate agents say buyers have growing confidence in the economy and want to take advantage of interest rates hovering near historic lows, but sellers who have seen their home values slide by 25% or more from the peak of the market in 2006 and 2007 are waiting for prices to climb.

“We all have lots of buyers and very little to show them,” said Gillan Abercrombie Frame of Coldwell Banker in La Cañada Flintridge.

Sorem said months of inventory, a statistic measuring how long it would take to sell everything listed in a given marketplace, is as low as he’s ever seen in South Pasadena, is dropping in other cities and comes as prices rise.

The median price of a Pasadena home in April was $676,000, according to Sorem, up from $608,000 a year ago. The median price in La Cañada Flintridge dropped from $1,225,000 a year ago to $1,117,000 in April, but that figure is higher than it’s been since last spring.

In San Marino, the median price grew to $1,685,000 in April from $1,638,000 a year earlier, though the market’s small sample size tends to make monthly numbers unreliable. The same holds true in South Pasadena, where the median dropped from $925,000 in April to $790,000 last month as the market for smaller homes heated up.

Lara Arslanian of Podley Properties in Pasadena said buyers competing for the scarce properties on the market are driving deals well above the asking price. “I feel like it is 2006 with the multiple offers,” she said. “If a home is priced fairly, those properties are not sitting at all.”

Frame said La Cañada homes in the range of $1.4 million or less are now nearly fetching the prices they did before the bubble burst, though the high-end market is softer.

People who listed their homes in the doldrums of 2008 and 2009 had to do so for personal or financial reasons, she said. Today’s would-be sellers are waiting for the better days that appear to be on the horizon.

“Realistically, we are not in a seller’s market yet,” she said.

As for the wave of bank-owned properties that has been rumored for years, agents said they believe it may have crested quietly over the last several months. Investors have bought many at auction, fixed them up and begun listing them at competitive prices, said Frame, who noted that few such homes exist in La Cañada.

Asked how things feel this spring compared to last, Arslanian said, “It feels like Christmas. I see a huge difference in activity.”