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Shortage of houses in market

Economic conditions ideal for buying, the few homes for sale attract multiple bids

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

It’s almost the perfect storm in the housing recovery. All conditions are good for buying a home — except for the severe shortage of houses listed for sale, according to a 2012 Annual Housing Market report released this month.

And that shortage is only heating up the bidding wars on the homes that are available for sale.

Foreclosures are slowing, and more lenders are approving homeowner short-sales — selling homes for less than the amount owed on the mortgage.

Economists report consumer confidence is rising.

Home prices are reasonable by California standards compared to the inflated prices that existed prior to the housing market crash, experts report.

Mortgage rates hit a new low last week. Freddie Mac announced that rates dropped to a historic record low of 3.34 percent for a 30-year fixed rate. The 15-year fixed rate fell to 2.65 percent.

And something Realtors struggled to find during the economic downturn has emerged — buyers who are ready to buy homes.

What’s lacking is housing inventory, according to the report released by the California Association of Realtors.

Homes sold faster in 2012, with equity sales changing hands in 32 days — compared to 67 days in 2011.

In Santa Clarita, some homes are selling even more quickly than that.

Multiple offers

Some 57 percent of home sales received multiple offers in 2012 — the highest in the past 12 years, the California Association of Realtors reported.

“This has definitely turned into a sellers’ market,” said Erika Kauzlarich-Bird, who works for Triple D Realty and is president of the Santa Clarita Valley Division of the Southland Regional Association of Realtors.

“I listed a property on Sunday and by Tuesday afternoon I had 24 offers, most above asking price,” she said.

Locally, the housing shortage began earlier this year, but now a lack of housing is being reported across the country, experts said.

There aren’t enough houses listed for sale to meet buyer demand, said Kathy Salisbury, also of Triple D Realty. Santa Clarita has only about a 1.5-month supply.

Some houses are selling within a matter of hours or days; some take a couple of weeks, Salisbury said.

The inventory a year ago was a 4.8-month supply, the Southland Regional Association of Realtors reported. A five- to six-month supply is considered healthy.

“If you find a standard sale, you better not blink or it’s gone,” Salisbury said. “We had a San Fernando Valley property, standard sale, 23 offers in 24 hours.”

Last spring, The Signal followed the trials of buyers as the housing inventory contracted. The Ham-Yoos, relocating from Washington, D.C., thought it would be a buyer’s market.

They found the opposite to be true in Santa Clarita. The couple made offers on five homes and were squeezed out on the chance to buy even one of them because of multiple offers. On a limited timeline, they finally found a home in Stevenson Ranch on the high side of their ideal price range.

The local market has gotten even tighter since then.

No conditions

The competitive housing environment led to more properties being sold at or above the list price, with 41 percent of homes selling without a markdown from the asking price, the California Association of Realtors said.

“We are also watching sellers push for the removal of the appraisal contingencies for every offer submitted,” said Connor MacIvor with RE/MAX. “This is creating havoc on the ‘trust’ part of the real estate equation.”

Another headache for buyers, he said, is that sellers are starting to price their homes far beyond comparable value in the area.

The problem with this scenario is that appraisers, slapped for overinflating home values during the subprime mortgage market mess, won’t match the selling price if they can’t justify it.

And that leaves desperate homebuyers between a rock and a hard place. They either have to look for another home or come up with the difference out of their own pockets between the appraised value and the actual sales price because lenders won’t make loans over the prices set by an appraiser.

Generally the average for selling a home without a markdown from the asking price has been 32 percent, but it’s now up to 41 percent. The number of homes being sold quickly, and with multiple offers, is the highest seen since 2005, the California Association of Realtors said.

The market conditions are “flashbacks back to 2006,” MacIvor said. And the bidding wars are making it even more difficult for first-time buyers to become homeowners, said LeFrancis Arnold, the California Association of Realtors president.

First-time buyers often cannot compete with terms other buyers are offering, Kauzlarich-Bird said.

“Once the seller signed off on one home, I still received offers emailed to me for back up,” she said.



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