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Bob Khalsa: Santa Clarita Valley home sales and prices jump higher

Posted: June 6, 2013 2:00 a.m.
Updated: June 6, 2013 2:00 a.m.

Bob Khalsa

 

After multiple years of gloomy to dismal news, it sure is fantastic to report that the local home resale market is taking giant strides forward.

Single-family home sales in the Santa Clarita Valley during April increased 18.8 percent. Resale prices rose 10.7 percent.

Both owe a lot to heavy demand — as in, multiple offers on virtually every listing — and an extremely limited inventory of homes for sale, the Southland Regional Association of Realtors reported recently.

A total of 209 homes changed owners compared to the 176 sales of April 2012. While still down 48.1 percent from the record high of 405 sales in June 2005, the April tally was up 111.1 percent from the record low of 99 sales in January 2008.

Similarly, 108 condominiums closed escrow in April throughout the Santa Clarita Valley. That was up 6.9 percent from a year ago and 13.7 percent higher than March.

Heavy activity was expected, simply because so many families have been unable to buy for years and Santa Clarita, more than ever, remains a popular place to live.

Despite solid statistics, we’re far from a normal market, which won’t appear until more current owners are above water and prospective homebuyers are not pushed out by investors able to pay all-cash, especially in homes priced under $450,000.

My experience is that investor activity is a smaller factor in higher price ranges, simply because it’s more difficult to break even, let alone show the type of profit that triggers investor interest.

Investors have a much stronger presence in entry-level price ranges, where they often beat out traditional buyers with all-cash offers and where foreclosures and short sales, while diminished, remain a factor.

One thing is clear: We’re in uncharted territory and will remain there due to a still unstable job market.

A mere 338 properties were listed for sale at the end of April on the SRAR’s Multiple Listing Service, which remains the best way to market real estate. The inventory was down 49.9 percent from a year ago, and was a 1.1-month supply at the current rate of sales when a 6-month supply is needed for a balanced market.

With few properties to satisfy legions of prospective buyers, the median price of single-family homes sold last month was $415,000, up 10.7 percent from a year ago. The median price of condos came in at $241,000, up 23.6 percent over April 2012.

Home and condo prices are well below their boom-era highs — down 35.5 percent and 39.3 percent, respectively — yet median prices have increased 22.1 percent and 41.8 percent from their record lows.

Of particular note is the fact that many condominium homeowner associations throughout the Santa Clarita Valley are still struggling. They have little or no reserves to pay for improvements, while the percentage of renters in condos purchased by investors has increased, making it more difficult to land FHA financing, a primary vehicle used by entry-level homebuyers.

Standard equity sales are making a comeback. Of the 317 total closed escrows throughout the Santa Clarita Valley during April, 60.9 percent were standard sales; 24.3 percent were short sales; and 14.5 percent were foreclosures. Distressed sales combined accounted for 38.8 percent of all April transactions, which as a remarkable improvement from just November, when distressed sales held 59.9 percent of the local market.

Yes, it’s great to have good news; it will be even better when there are no contingencies to report.

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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