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SCV sees spike in home sales

Posted: January 31, 2009 10:06 p.m.
Updated: February 1, 2009 4:59 a.m.
 
Dips in interest rates and plummeting home prices due to foreclosures contributed to a 10.1-percent increase in single-family home sales in the Santa Clarita Valley, when first-time buyers, "move-up" buyers and investors took advantage of the market.

"Prices are at an all-time low," said Mike Bjorkman, a real estate broker of RE/MAX in Valencia. "All the stars are aligned. Anybody who can buy should. (It) doesn't matter where or at what price range."

The number of single-family home sales in the Santa Clarita Valley shot up by 10.1 percent during 2008, a reversal from three consecutive years of declining sales, the Southland and Regional Association of Realtors reported Tuesday.

The association's report on annual sales showed that 2,194 single-family homes were sold 2008, compared to 1,993 in 2007.

Meanwhile, prices have dropped by 22 percent, with the annual median price of single-family homes sold last year moving to $444,958 in 2008 from $570,492 in 2007.

Bjorkman said interest rates, which have dipped below 5 percent, are the major factor bringing in buyers.

"With the better interest rates and less expensive homes, you're able to look at something a little more expensive than what you were (originally) looking for," said Gina Beltran, who recently moved into a foreclosed two-story house in Valencia. She and her daughters, ages 11 and 14, moved to the house from an apartment in Stevenson Ranch.

Beltran spent a year and a half looking at smaller town houses and homes costing between $300,000 and $325,000, but the lower interest rate on the foreclosed home in Valencia led her to consider a price a little above range limit. The deal bought her a larger home.

"I got an excellent deal," Beltran said. "It has a small yard, it has a two-car garage and basically the square footage of the home is larger than the town homes I looked at."
Bjorkman said lower prices on foreclosed homes are a large factor in buyers' decisions.

"The prices are 3 percent to 5 percent under the market," Bjorkman said. "Banks are willing to get rid of their assets."

The bracket of home buyers has also expanded because of smaller required down payments.

Instead of the usual 10 percent to 20 percent, Bjorkman said home buyers are now putting down about 3.5 percent, opening the market to "a whole lot of buyers that normally couldn't (purchase)."

The real estate broker said most buyers for foreclosed homes are first-time buyers, and investors taking advantage of the market. He also sees a lot of buyers who can afford to move into bigger or better-located houses.

"They can get more than twice the size in a better neighborhood for the same price as they paid for the home they are in now," Bjorkman said.

A federal tax credit this year also eases the process of purchasing. A first-time home buyer credit for up to $7,500 is available to buyers for homes purchased between April 9, 2008 and June 30, 2009, working much like a 15-year interest-free loan. The tax credit can be claimed on new Form 5405 and is repaid each year as an additional tax.

Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the credit.

Whether Santa Clarita Valley residents buy to take advantage of the tax credit, the foreclosures or both, Bjorkman said now is the time to make purchases.

"If you buy right now, it's cheaper than renting," he said. "Over the next six to 12 months, there's going to be a whole other batch of foreclosures coming into the market because of all the layoffs."

The focus on single-family homes led condominium sales to fall during 2008, but the decline was the smallest in three years, according to the realtor association report. The record-low number of 836 Santa Clarita Valley condominiums sold in 2008 represented a decline of only 0.6 percent, as opposed to 29.6 percent in 2006 and 32.5 percent in 2007. Meanwhile, home and condominium inventory is decreasing, with 36.5 percent less listings in December than the December of the previous year.

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