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Home sales slow in stabilizing market

Posted: October 28, 2013 6:59 p.m.
Updated: October 28, 2013 6:59 p.m.
 

SANTA CLARITA - The home resale market blinked in the Santa Clarita Valley during the month of September.

Sales of homes slowed as summer ended and the kids went back to school, but Realtors say the market is also adjusting to a “new normal.”

Sales always drop this time of year, said Bob Khalsa, president of the Santa Clarita Valley Division of the Southland Regional Association of Realtors Inc.

Slowing sales resulted in nearly 9 percent fewer single-family homes being sold from a year ago, but sales of condos were up 9.9 percent, the association reported.

And while median prices dipped slightly, they are up for both homes and condos over the prior year.

Single-family home median prices are up 16 percent from 2012, and condo prices jumped 35 percent.

“The great news is it allowed the market to actually become a little healthier,” said Paul Gonzales with Troop Realty. “Average days on market increased to a reasonable rate.”

Little changes
A lot of little changes are adding up to ongoing improvement in the local home resale market, Khalsa said.

More homes are being bought by owners who will live in them as investors continue to pull out of the market due to rising prices, he said.

Investors began pulling back in August, said Connor MacIvor with RE/MAX.

The realty group’s data for the SCV shows foreclosures only represented 5.5 percent of the market. One year ago, they were nearly double that amount.

And short-sales — in which a lender agrees to sell a home for less than what is owed on the mortgage — dropped significantly, making for fewer options among investors.

A year ago, short sales accounted for nearly 33 percent of all sales. In September, they represented only 11.4 percent of all sales.

“We had six active investors in August,” MacIvor said. “All pulled back, stating the numbers with regard to housing prices did not pencil.”

Eased requirements
There is also improved access to affordable home loans as lenders slightly ease requirements and move back into the home mortgage market, Khalsa said.

“Now that buyers are seeing mortgage rates holding steady, and still some of the lowest in history, and we have a little more inventory here to choose from and the country is not defaulting, we will start to see more sales,” said Kathy Salisbury with Triple D Realty.

The gradual return of new home construction also benefits and influences the resale market, Khalsa said.

As for slowing sales in September, slowly rising mortgage rates and steadily climbing home prices play a role in sales, Salisbury said.

“Fed Chairman Ben Bernanke hinted at the end of the bond-buying program in late May, which led to a two-month spike in interest rates over the summer,” said local Realtor Cherrie Brown. “We saw rates get close to 5 percent.”

That rate increases over the summer reduced buying power up to $30,000 for some buyers, she said. The combined monthly mortgage payment rose when the monthly fee paid for interest rose.

Misbehaving Congress
A misbehaving Congress also affected the market, Realtors said.

“The market shutdown had a lot to do with the slow-up in home sales as well as the overall confidence people felt,” said Pam Ingram with RE/MAX.

When the government threatens to default, people become paralyzed with fear, Salisbury said.

But, the partial government shutdown also had a positive effect on rates, Gonzales said. It brought them back down.

“Rates had risen in early August,” he said. “This put the brakes on the market and took many out of the game.”

Rates are low again, however, so buyers can get back in the game, said Erika Kauzlarich-Bird with Triple D Realty.

And prices stabilized after jumping in August.

“We have had over 70 real estate listings that have had their prices reduced in the past seven days,” MacIvor said. “It could have been (due to) over-zealous sellers or over-zealous agents.”

Overall, the resale market is also is becoming healthier, Khalsa said.

Inventory has risen from a year ago as well, creating a more balanced market.

jana@signalscv.com
661-287-5599

 

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