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Bob Khalsa: Rising Home Sales Boost Economy

Posted: May 24, 2013 9:49 a.m.
Updated: May 24, 2013 9:49 a.m.

Bob Khalsa

 

With the return of traditional homebuyers in ever-greater numbers, the powerful impact of an improved housing market on the local, state, and national economies is, quite frankly, palpable.

Each home sale generates a ripple that yields incremental improvement in the job outlook, retail sales, government ledgers, personal savings accounts and, perhaps most importantly, more stable communities.

It’s no coincidence that our collective fortunes waned as individual families lost homes and empty, untended, foreclosed houses down the block cast a pall over entire neighborhoods.

Likewise, with traditional equity sales now at a five-year high and distressed sales at the lowest numbers in years, the recovering housing market leads to improvements at all levels, touching all lives.

This week the Southland Regional Association of Realtors reported continued strong improvement in home and condominium sales while median prices hover at levels not seen since 2007: Home sales up 18.8 percent; condo sales up 6.9 percent; and median prices jumping higher for both categories, 10.7 percent and 23.6 percent, respectively.

No doubt the continued dire shortage of homes listed for sale in the Santa Clarita Valley — a mere 338 active listings, which was a near-record low 1.1-month supply — in part caused by a still-too-high number of families who owe more than their home’s current market value, slows a full recovery from the Great Recession.

Yet the near stampede of prospective buyers to open houses and the continued onslaught of multiple offers are testaments to the improved home market and renewed faith in the economy.

The return of typical homebuyers translates to fewer problem sales. Foreclosures and short sales accounted for nearly half of local sales a year ago; this April, distressed sales in the Santa Clarita Valley were down to 38.8 percent, while equity sales rose to 60.9 percent. Statewide, equity sales are at the highest level since February 2008.

As prices rise, more underwater owners inch closer to once again having equity. It will be a joyous day in the now not-too-distant future when the words "underwater," "foreclosure," and "short sale" are relegated to the dustbin of history.

Bob Khalsa 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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