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SCV’s January home sales slow

Posted: February 26, 2014 3:22 p.m.
Updated: February 26, 2014 3:22 p.m.
 

Following a statewide trend, sales of existing Santa Clarita homes slowed in January, according to numbers released by the Southland Regional Association of Realtors on Wednesday.

Experts pointed to the tighter lending rules that took effect in January, as well as a lack of affordable homes.

Nearly 83 percent of all local sales came from homeowners with equity in their homes.

“Investors played a big part of our market last year, but in mostly short sale opportunities. As we saw a decrease in short sales, the return on investment has decreased,” said Cherrie Brown of HomeSmart.

Distressed sales — where lenders accept a sale price lower than is owed on the property — only represented 16.2 percent of the market in 2014, down from 52.1 percent of the market a year ago.

“We are still riding the 16-22 percent increase in prices that we observed between February 2012 and October 2013,” said Connor MacIvor with Remax. “Buyers that did not or were not able to buy in 2012 and 2013 are not too excited about the increase in prices and many have been ‘priced out’ as a result in the current market.”

While home sales in the Santa Clarita Valley were the slowest since 2008, median prices were just $27,000 shy of the prices recorded when the market crashed that year.

The realty association reported the sale of 138 local homes in January and a median price of $432,900.
Still, existing home sales dropped 7.4 percent from a year ago.

Condominium sales, however, shot up 10.2 percent over January 2013. They were the strongest since 2007, with a recorded sale of 65 condos and a median price of $250,000. Prices were the most robust as well since 2008.

“We’re definitely in a transition phase where buyers and sellers are coming to grips with today’s housing resale market,” said Nancy Starczyck, president of the Santa Clarita Valley Division of the Southland Regional Association of Realtors.

“I expect people to have an improved perspective with enough confidence to jump into the market as busy spring and summer home buying seasons get under way.

“Today’s market is dramatically different from even mid-2013,” Starczyk said. “There are only seven homes currently listed that are priced under $350,000. Buyers will find more condos and townhomes for sale, yet the total inventory is pretty bare bones.”

There were 496 active listings throughout the Santa Clarita Valley on the association’s Multiple Listing Service at the end of January.

“I think our inventory is still too low and sellers with equity are slowing coming on the market,” said Kathy Salisbury with Triple D Realty.

Also, tighter lending is forcing some buyers into FHA financing, which has Private Mortgage Insurance — a monthly fee that can add to a payment and that’s factoring into what a home buyer can afford, she said.

“Lower sales results from a combination of seasonal forces, dropping affordability and tightened underwriting for home loans, but today’s miniscule inventory could well be the biggest factor,” said Jim Link, the association’s chief executive officer.

“It’s a good, healthy thing to see standard sales rise as investors and distressed sales depart, although traditional sellers have yet to fill the void.

“That will begin to correct itself in the months ahead,” Link said, “especially as home sellers gain greater confidence in the economy.”

MacIvor predicts that 2014 is going to be the year for the move-up or seasoned buyer.

“First-time buyers are going to continue to save money, and hopefully enough real estate inventory will come onto the market to switch it from a sellers’ to a buyers’ market,” MacIvor said.

At the current pace of sales, the inventory represents a 2.4-month supply. To hit the desired six-month supply, where neither the buyer nor seller has an advantage, the region would need 1,220 active listings.

jana@signalscv.com
661-287-5599

 

Comments

michael: Posted: February 26, 2014 5:13 p.m.

This is a good thing, we do not need another bubble driven but foolishness and greed! I am a home owner for the record.


chico: Posted: February 27, 2014 7:03 a.m.

Experts say....I guess.....

But nothing in the piece about interest rates, the cost of money.

Getting approved for a loan is harder now, yes, but the cost of money started creeping up in Aug of 2013 and it is my observation this took the steam out of the rising price trend - Now the rising trajectory of the market appears to have topped out.

That being said, with looming tax increases and lost jobs from lame government policy - I see 2014 much in line with 2006 when the market last peaked - and by the next year, 2007, the bandwagon was on fire and careening down the hill.

Therefore, I predict a 'flat' year in 2014 with a drop in the market for 2015, as short sales and REO's mount a comeback.


Unreal: Posted: February 27, 2014 8:55 a.m.

If we vote for a Republican in Nov. 2016 then in 2017 we should see lowering of taxes, the job market bounce back strong, followed by an increase in home values.

--edited.


EgbertSouse4U: Posted: February 27, 2014 1:12 p.m.

Home sales were better last year because opportunist investors were buying the shortsales and foreclosures to flip them once again.... one of the very reasons that created that bubble we saw years ago. Why can't people just buy a house to live in?


castaicjack: Posted: February 27, 2014 1:12 p.m.

In response to the nonsense posted by "unreal", the great recession and the housing crash occurred under the watch of a Republican president. Oh, but Dubya did say he was sorry. In general, the taxes aren't going to be lowered no matter who's in control and even if they were, it'll be like the decrease in our gas tax which will have no observable decrease in the cost we ultimately pay at the pump. Moreover, as the supply of new housing increases with 20,000 homes off the 126, 1,045 in Castaic and 21,000 more in "Centennial City", the law of supply and demand takes over and trumps anything "unreal" has to say, with the end result of falling real eastate prices for existing housing.


Unreal: Posted: February 28, 2014 9:31 a.m.

castaicjack: The housing crash was caused by Dems. pushing Freddie and Fannie loans to many people who really could not afford it allowing them to purchase homes with little or nothing down. Also corrupt banking practices were to blame. The President had little to do with any of this.

A President does have control over taxes and signing or pushing legislation that either hurts or helps the business climate which will help housing prices.

As far as the new housing that should be selling in 2016 I can't help you there (although a background in RE allows me to say that well maintained homes always sell well) but you better hope that the economy is doing great in 2017 to help mitigate that issue or it will be a double whammy. Would you rather be selling in a soaring economy or a stagnant one?

See the comments below from the CEO of Freddie Mac and Yale economist Robert Shiller.

"The mortgage and credit crisis was caused by the inability of a large number of home owners to pay their mortgages as their low introductory-rate mortgages reverted to regular interest rates. Freddie Mac CEO Richard Syron concluded, "We had a bubble",and concurred with Yale economist Robert Shiller's warning that home prices appear overvalued and that the correction could last years, with trillions of dollars of home value being lost. Greenspan warned of "large double digit declines" in home values "larger than most people expect."



castaicjack: Posted: February 28, 2014 7:01 p.m.

Unreal: Your disjointed response doesn't deserve a reply but it's a rainy day, so...
For starters, you stated in your original post that "lowering of taxes, job market bounces back, followed by an increase in home values," if we vote Republican. Well, did the Bush tax cuts stave off the recession? Of course not. Of course, you obviously forgot about the latter when you subsequently stated, "A president does not have control over taxes" (Er ah, have you ever heard of the Bush tax cuts?)
The housing crash was caused by the Democrats? Lol!... As if they were at their day jobs at Freddie and Fannie twisting the arms of people who very well knew they were getting in over their heads and did it anyway. Oh I forgot, those people, many of whom were Republicans weren't really grown adults, and responsible for their own actions. Of course, the general analysis of why the housing bubble occurred and burst is essentially correct, but there's nothing in it to suggest the Democrats perpetuated it.
Your non-sequitur response about my point regarding more housing actually buttresses my own argument. The supply goes up, and all things being equal, our economy will incur good and bad years no matter who's in office as it usually does, the law of supply and demand takes over, and real estate prices drop. And your response to the latter is "I can't help you there?" Are you playing with a full deck?


Unreal: Posted: March 3, 2014 8:48 a.m.

castaicjack: Try reading carefully next time. I said that Presidents DO have some control over the taxes.

Since you can't read I guess the rest of the argument should be skipped as I am not sure you would understand it.



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