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Real estate rebounds in 2012

Posted: December 23, 2012 2:00 a.m.
Updated: December 23, 2012 2:00 a.m.
 

The long-awaited recovery in the real estate market hit with an explosion in January 2012 when local Santa Clarita Valley home sales posted double-digit increases of 47.5 percent and price increases of 4 percent from January 2011, according to the report by the Southland Regional Association of Realtors.

And pending escrows, a measure of future resale numbers, suggested that the SCV’s upbeat sales activity would continue in the months ahead. Pending escrows in January were up 10.7 percent.

But the dramatic jump in January numbers prompted a local official with SRAR to caution that it was “too early yet to call it a trend.”

The numbers, however, kept improving throughout the year.

By February, SRAR reported that sale of existing homes was the strongest they had been since the same period in 2007, even surpassing points in 2010 when state and federal tax credits were available for first-time home buyers.

And a new twist was being factored into the market. The number of homes available for sale represented a 4.5-month supply. But, by last October, that inventory had dropped to a record low of 1.2 months, SRAR reported.

A healthy market is measured by an inventory supply of five to six months, whereby neither the seller nor the buyer has an advantage.

Median prices, however, remained one of the last hurdles for a recovering market. And those too, began to change as mortgage rates hit an all-time low as well.

Statewide sales prices were up 10 percent reported economists for the California Association of Realtors by year-end. And they predicted prices will increase another 5.7 percent in 2013.

The record-low inventory of houses for sale prompted bidding wars amongst buyers — with some buyers offering far more than the home’s appraisal price causing them to dip into their pockets to make up the difference in cash.

Another factor altering the market was the number of distressed properties — foreclosures and short sales — listed for sale on the market. In April, those homes made up close to half of the state’s resale inventory, reported real estate research firm DataQuick.

Foreclosures are far and few between, said Cherrie Brown with Keller Williams VIP Properties. The number of foreclosure filings locally is down 45 to 50 percent from the prior year, she said.

While Realtors urged caution about a recovery in January, by the end of the year they confirmed the signs of a recovery as market activity heated up.

Driving into Santa Clarita, there should a huge sign on the I-5 that reads “Welcome to Santa Clarita: We’re in escrow,” said Mike Lebecki, with RE/MAX of Santa Clarita.

Multiple offers

With inventory dwindling, bidding wars commenced on the homes that were listed for sale. Last spring, The Signal followed the trials of three homebuyers who were forced to compete with multiple offers on each home they wanted to buy.

“Multiple offers became the norm and many a would-be, first-time homebuyer planning to purchase a property for his/her own use was repeatedly disappointed getting outbid by other investors,” said Bob Khalsa with United American Realty and the 2013 SCV president of SRAR.

By June, SCV sales hit a five-year high, topping any record set since March 2007, leading Realty experts to report the housing market was definitely rebounding from one of the worst national recessions in 70 years.

But as the market heated up, inventory dropped dramatically. The number of homes available for sale in June represented only a 1.6 month supply – down from 3.8 months in June.

“What is a little amazing is that sales continue to come even as the inventory drops lower and lower with each passing month,” said Erika Kauzlarich-Bird, 2012 president of the SCV division of SRAR, back in June.

In June, more owner-occupied buyers than investors were coming back into the market as well, she reported.

“We have made a turn here in our valley,” said Kathy Salisbury with Triple D Realty in Stevenson Ranch in June. “Most everything in Santa Clarita is getting multiple offers, especially standard sales.”

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

And median prices began stabilizing.

Home sales

In July, Connor MacIvor with RE/MAX, noticed more cash buyers entering the market who intended to live in the homes — and buying homes without regard for appraisals, further increasing the prices he said.

By August, SCV home sales were up nearly 29 percent over July, SRAR reported. And median prices of single-family homes were up as well. Also, the number of home listed for sale, which actually sold, made a dramatic jump over the period when home sales crashed.

Tracking single-family home prices in Stevenson Ranch, MacIvor reported the median price in January was $596,249. By Nov. 9, the median sales price was $636,296, he said.

SRAR reported that 96.2 percent of all homes listed for sale in August 2012 sold. In contrast, only 30.1 percent of all homes listed actually sold in August 2007.

Homes were also selling faster. Sales of SCV homes where the owners had equity in their homes changed hands in 32 days in 2012, compared to 67 days in 2011, the association reported.

By October, the last month for which local data is available from SRAR, home sales topped the September tally and year-over-year sales again, SRAR said. But inventory was seriously low.

2013

Going into next year, what will continue to be an issue is lack of inventory, said Kathy Salisbury with Triple D Realty in Stevenson Ranch. “We don’t have enough supply to keep up with the demand.”

“If demand continues to strip supply, prices will continue to rise though the equilibrium point where the two become equal is hard to predict,” Khalsa said.

jana@signalscv.com

661-287-5599

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