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SCV prime for home sales

Posted: August 2, 2012 2:00 a.m.
Updated: August 2, 2012 2:00 a.m.
 

After years of dismal news reports about the residential housing market, it has been pleasurable to have month after month of uplifting reports.

The most recent reports had June home sales in the Santa Clarita Valley higher than any time since 2007. A total of 238 single-family homes changed owners during June, which is 9.7 percent higher than a year ago and up 28 percent from the 186 sales of this May.

Condominium sales also continued to rebound with 93 closed escrows, up 16.3 percent compared to June 2011 and 12 percent ahead of the May tally.

Most notably, local home sales are up 140 percent and condo sales are 200 percent better than their respective lows for this cycle, both of which came in January 2008.

The strong sales come as no surprise simply because Santa Clarita is such a fantastic place to live and our local economy is so solid.

What was a little amazing was that sales continued to rise even as the inventory of homes listed for sale dropped lower and lower with each passing month.

Indeed, there are so few properties on the local Multiple Listing Service operated by the Southland Regional Association of Realtors, that it might well stall what has been a steady recovery from the nation’s worst economic recession in nearly 70 years.

There were 544 properties listed for sale throughout the Santa Clarita Valley at the end of June, which is 51.3 percent fewer than a year ago, representing a 1.6-month supply at the current pace of sales when we should have a five- to six-month supply for a balanced market.

The number of new listings last month was more than 100 properties below the total sold, meaning the inventory is destined to drop even lower — unless owners with equity overcome an understandable hesitancy to jump into the market.

Available Real Estate Owned properties, which are bank-owned properties typically acquired through foreclosure, are dropping and short sales, which is where a home is sold for less than what is owed, are slowly working through the backlog of underwater owners — some of whom have little choice, but to sell now.

Yet recent reports from the Association of Realtors show that standard owners, those with equity, are getting more and more active, and with good reason, I might add.

Of last month’s sales, where we have the data available, 32.5 percent involved standard owners with equity in their homes. That compares to 15.3 percent for REOs and 29.4 percent for short sales. Statewide statistics show that sales of distressed properties are in decline, most notably REOs, while standard sales are on the rise ­— a sure sign recovery is underway.

No doubt some of the owners with equity decided to sell simply because they had to relocate for a job or due to changing family needs or some other urgent reason. Yet many of those standards owners who sold last month realized that there is opportunity out there, but it’s an advantage that may soon disappear.

I’d suggest that any owners with equity who are thinking about trading up to a bigger or better home, or trading down to a smaller residence, would have a unique advantage in today’s market: the increasingly tight inventory.

In nearly all instances, correctly priced properties today receive offers from multiple buyers. Typically those homes sell for more than the list price.

And, once sold, those owners are in an excellent position to capture historically low-interest rates on home loans and the lowest prices on local housing in decades, thus leveraging every housing dollar to their advantage.

It’s a classic risk/reward scenario.

If you have faith in the national and local economies, a steady source of income, some savings, a solid credit history and a desire to change your housing situation, I have one question to ask you: What are you waiting for?

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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