View Mobile Site
 

Ask the Expert

Signal Photos

 

Signs pointing up in home market

Forecast for next year says more gains

Posted: October 18, 2012 2:00 a.m.
Updated: October 18, 2012 2:00 a.m.

A home sits in the southern end of Stevenson Ranch in August.

 

Tracking trends and citing specifics in the housing market, the California Association of Realtors released its 2013 forecast this month, and the signs are all good.

Forecasting that statewide home sales will increase for the third consecutive year, the Realty association predicts year-end 2012 home sales will result in an increase of 5.1 percent over 2011; and projects 2013 sales will gain another 1.3 percent.

Sales, however, will be higher if more inventory comes back on the market, CAR reported.

“Watching as the buyers in the Santa Clarita real estate market become more frustrated is quite revealing,” said Connor MacIvor with RE/MAX. “The news on most fronts is we are close to, or have achieved, recovery.”



Home sales gains

Median prices are showing even healthier gains. The median price of a home in California is expected to increase by 10.9 percent this year, and CAR forecasts an additional increase of 5.7 percent in 2013.

“There is such a sense of buyer confidence with many of our buyers that they are willing to remove the appraisal contingency and offer cash contributions to close the deal, and not worry about the “appraised value,” said Cherrie Brown with Keller Williams VIP Properties in Valencia.

“I could certainly see a increase in median home prices and the number of sales in our future,” she said.

Erika Kauzlarich-Bird, Southland Regional Association of Realtors, SCV Division, agrees.

“We are starting to see a light at the end of the tunnel,” she said.

Price increases in the Santa Clarita Valley will be gradual, Kauzlarich-Bird predicts.

She also advises homeowners who lack enough equity in their homes to refinance and that now would be a good time to consider moving up — buying into a new mortgage with lower interest rates.



Shadow inventory

The dreaded “shadow inventory” of distressed properties that in the past few years experts have claimed would hit market en masse — flooding communities with excess inventory dragging prices down further — has yet to appear. And many experts now don’t believe shadow inventory is a threat.

“All the housing numbers show us that we will not see any dramatic flood of inventory for our local market,” Brown said.

California foreclosure filings, which peaked in the first quarter of 2009 according to CAR, have steadily declined in 2012 and are now closer to the number of defaults in early 2007 — before the market crashed.

Distressed sales, which once dominated the market, only accounted for 37 percent of statewide sales in August. The number of bank-owned and foreclosed homes for sale is down.

August sales of bank-owned properties only represented 14.4 percent. Short sales — where a lender agrees to sell a home for less than the balance due on the mortgage — accounted for 23 percent, according to CAR.

Standard sales in August, where homeowners have equity in their homes, represented 62 percent of the sales statewide, the association reported.

Locally, standard sales today represent 68 percent of all the homes listed for sale in the Santa Clarita Valley, Brown said. Only 5.6 percent of the SCV listings are for bank-owned properties.

Current SCV short-sale listings represent 27 percent of the active listings in the region, Brown reported.

Just last year, buyers making offers on short-sale listings were worried that values would drop by the time the short sale process was complete, Brown said.

That’s all changed this year. Buyers are now gaining instant equity in their homes — and record low inventory levels may be contributing to price increases.



Inventory

“We had a buyer recently purchase a home in Saugus for $299,000,” Brown said. “While the client waited nine months for their short sale approval, the appraisal came in at $350,000.”

The number of homes listed for sale locally has presented a challenge for Realtors helping clients who want to buy a home. Experts and buyers locally say the situation has resulted in bidding wars. The number of days a home remains on the market — particularly those with equity in their homes — is dropping as well.

According to CAR, unsold inventory is nearing record lows, nearly matching 2005 when the home resale market was hot, the forecast reported. Statewide, the number of months it would take to sell all inventory is 3.2 months.

But locally, the low inventory levels have been even more dramatic in the SCV. The Southland Association of Realtors reported there was only a 1.4 month supply of homes listed for sale in August, compared to a 3.5 month supply in the prior year. A five- to six-month supply signals a balanced market.

With historic lows for interest rates, and an area with good schools, and low crime and unemployment levels, locally, the market is more attractive than other areas of Los Angeles County or the state, said Kathy Salisbury with Triple D Realty in Stevenson Ranch.

“Prices are increasing here, interest rates are low, there are loans available, there are buyers, we need more sellers,” Salisbury said.

jadkins@the-signal.com

Comments

Commenting not available.
Commenting is not available.

 
 

Powered By
Morris Technology
Please wait ...