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Recovery signs give encouragement to local Realtors

Posted: May 25, 2012 4:30 a.m.
Updated: May 25, 2012 4:30 a.m.
 

Multiple reports gave positive signs this week and showed a mounting strength in the resale and new home market, according to Santa Clarita Realtors.

Home prices continued to rise in April, and buyers bought more previously owned homes in April, rising 3.4 percent, according to the National Association of Realtors. The gains in sales and home prices were national figures.

“It is no longer just the investors who are taking advantage of high affordability conditions,” said Lawrence Yun, NAR chief economist. “A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices.”

The national median existing-home price for all housing types jumped 10.1 percent to $177,400 in April from a year ago; the March price showed an upwardly revised 3.1 percent annual improvement, NAR reported.

“This is the first time we’ve had back-to-back price increases from a year earlier since June and July of 2010 when the gains were less than one percent,” Yun said.

Locally, list prices are starting to be exceeded by actual offers and purchase prices, said Connor MacIvor, with RE/MAX of office in Santa Clarita and Valencia.

New home sales
New-home sales marked a gain of 3.3 percent in April according to the National Association of Home Builders. On a regional basis, sales in California and Los Angeles County rose 16 and 13 percent respectively.

“In markets where demand is rising, we could be seeing a faster pace of recovery if not for persistently tight lending conditions that are slowing both the building and buying of new homes,” said Barry Rutenberg, NAHB chairman.

Local market
Locally, the Santa Clarita real estate is doing well, said Kathrine Salisbury, with Triple D Realty of Santa Clarita. The builders are moving forward with their projects.  The local recovery started around this time last year, as the economists for this area predicted, she said.


“The current real estate market has been a “buyers’ battle” of wills and money, MacIvor said. “Both of those items combined get buyers what they want.”


The diminishing share of foreclosed property sales is helping home values, said Yun. And the acute shortage of inventory in certain markets is leading to multiple biddings and escalating price conditions, he said.


Locally, Realtors have been reporting on escalating bidding wars for property for the past few months.


“My last two offers on sales between $300,000 and $400,000 had nine to 12 offers on them,” Salisbury said. “And one of those was for a short sale.” 


Standard sales, where a seller has equity in their home, can generate multiple offers throughout the Santa Clarita Valley, she said.


In fact, the market is heating up to the point that it’s putting some buyers in shaky positions, MacIvor said.

Buyers beware
“The waiving of the appraisal contingency has been the new thing with the current market,” he said. “Sellers have started to ask agents to tell their clients to remove the appraisal contingency from offers.”


For a buyer to say he or she will buy a home, no matter what, no matter how much lower the appraiser say’s the value is, seems a bit dangerous, he said.


If an appraisal comes in lower than the buyer’s offer, the buyer either loses lender financing altogether or has to come up with the difference in cash out of their own pocket.

Seller asking to have the appraisal contingency removed from an offer, whereby a buyer may safely back out of a deal if they lose their financing due to a lower than expected appraised value on a home puts, the buyers at considerable risk.

“If there no other contingencies in place, and if the property did not appraise for the amount the buyer said they were willing to pay, the buyer could lose their deposit,” MacIvor said. “And some sellers are also asking for increased deposit amounts.”

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