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Erika Kauzlarich-Bird: Perceptions, misconceptions, good news

Real Estate Talk

Posted: March 29, 2012 1:55 a.m.
Updated: March 29, 2012 1:55 a.m.
 

With so many reports focusing on the problems remaining in the housing market, it’s easy to overlook some really good news — home sales in the Santa Clarita Valley have increased in each of the last five months.

Actually, it goes back even farther, because the upward trend started in June of last year, with only one month coming in lower than the prior year. And even that was down by a mere three transactions.

Santa Clarita home sales during February were up 19 percent, while condominium sales rose 3.8 percent. In January, the increases were 24.8 percent and 33.3 percent, respectively.

As you drill down on the numbers, the patterns grow crystal clear, which is why it’s absolutely vital that residents work with professionals who know the local market and base decisions on only local statistics. California is a patchwork quilt of communities, all of which are in varying stages of emerging from the worst housing downturn in generations.

Luckily, Santa Clarita is one of multiple communities throughout California reporting good news.

Ironically, the market and economy would have improved even more, if only we had more homes listed for sale, which speaks to another misconception.

 

Inventory issues

Too many people read stories about tracts of foreclosed homes being bulldozed or sold as a block, yet those tales bear zero connection to what’s happening in our neighborhoods.

Like other California communities, instead of too many homes for sale, the inventory of homes for sale continues to plummet. There were a mere 861 active listings at the end of February, down 27.6 percent, compared with the 1,190 listings of February 2011.

At the current pace of sales, that represents a 4.5-month supply, close to the desired five- to six-month inventory, but down from a seven-month supply of February 2011.

Santa Clarita has a lot going for it and much to be grateful for, yet full recovery will remain elusive until conventional equity sales dominate the market and current homeowners see the advantages of listing their homes for sale.

“Acknowledging that there are opportunities today in every price category is different from believing it and acting on it,” said Jim Link, CEO of Southland Regional Association of Realtors.

“Prices are stabilizing, yet heavy activity in lower price ranges pulls the median price down,” Link said. “There’s pent-up demand out there, so prices will rally as the market works through distressed properties and buyers who have been waiting for a sign decide it’s time to jump into the market.”

 

Price misconception

That leads us to another misconception: Just as with sales and inventory, only by examining each neighborhood individually will buyers and sellers get a sense of what’s happening with resale prices.

Much of today’s activity is concentrated in the lower price ranges, which necessarily forces the median price down. The median price — the point where half of the homes sold for more and half for less — fell 7 percent during February to $385,000. The median has been floating between $340,000 — the record low for this cycle set last November — and $390,000 for the last 12 months.

Prices may be bouncing all over the place currently, but I’m confident that a clear upward trend will emerge sometime in the not-too-distant future.

No doubt today’s window of opportunity is closing, but I don’t have a crystal ball that tells me when that will happen or when the next market will fully emerge.

For now, however, what is clear is that home sales in the Santa Clarita Valley are up and, given forward looking statistics, sales will continue to rise in the coming months. And that’s some good news to put under your pillow.

Erika Kauzlarich-Bird is president of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.

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