Santa Clarita Valley Single-Family Homes and Condominium Resale Statistics

Santa Clarita Valley's balanced residential resale market frustrates home buyers expecting to snag deep discounts

The steady, consistent pace of the current residential housing market in the Santa Clarita Valley is frustrating prospective home buyers who falsely presume that fewer sales necessarily translates into greatly reduced resale prices, the Southland Regional Association of Realtors reported on Thursday, June 28.

The number of homes sold throughout the Santa Clarita Valley during May continued to hover 23.5 percent below the level of activity reported a year ago while prices remained flat or showed only modest declines.

A total of 179 single-family homes closed escrow during May, 23.5 percent below a year ago, but up 2.9 percent from April of this year.

Realtors also guided 90 condominiums into the hands of new owners, a total that was 26.8 percent lower than May 2006, but up 18.4 percent from this April.

"Buyers hear reports that sales are down from record levels or that some homes are in foreclosure and conclude that sellers and lenders are giving away properties, but that's just not the case," said Larry Gasinski, president of the Association's Santa Clarita Valley Division.

"If a home doesn't sell quickly owners and banks eventually offer incentives, but there are no huge bargains out there like there were during the early to mid-1990s," Gasinski said. "Other buyers are still sitting on the sidelines waiting to see what happens, yet any advantage gained in price has already been offset by slightly higher and still rising interest rates."

Gasinski and Jim Link, the Association's executive vice president, noted that buyers also incorrectly believe that the number of homes listed for sale has given all the negotiating advantage to buyers.

It's true that the inventory does favor buyers slightly more than sellers - a welcome relief after years of sellers being in control. However, the 2,240 active listings throughout the Santa Clarita Valley were up only 7.2 percent from a year ago and 3.7 percent higher than this April.

At the current pace of sales, Link said, the inventory represents an 8.3-month supply - just above the 5- to 6-month inventory that represents a balanced market where neither buyers nor sellers wield an advantage. A true buyers' market, like during the 1990s, would have a supply that exceeded a 16- or 18-month supply.

Just as Realtors strive to re-educate buyers, Gasinski and Link said Realtors report that sellers also sometimes make ill-informed choices that too often ruin the chance of a speedy sale.
"We hear it all the time from Realtors that even though sellers know the market has slowed down sellers insist on listing a home at a high price thinking they can reduce it later," Gasinski said. "Instead, what happens is that the homes do not even get shown because they are out of the price ranges of what people want to pay."

The median price of the single-family homes sold last month was $615,000, down 2.2 percent from a year ago, but up 3.4 percent from this April. Since the record high of $643,000 was set in April 2006, the median price has been hovering between $570,000 and $615,000.

The condominium median price of $355,000 was 9.4 percent below a year ago and down 7.8 percent on a month-to-month basis. The record high of $397,000 was set in January of 2006.
"The market is definitely shifting in favor of buyers," Link said, "but not in the sense of prices dropping dramatically.

"Buyers have a wider choice and more time now to consider their options," he said, "but if a property is listed correctly at the current market price, buyers will be sorely disappointed and miss an opportunity if they are looking for a 20 or 30 percent discount. It simply is not happening."

Courtesy: Southland Regional Associaiton of REALTORS

San Fernando Valley Single-Family Homes and Condominium Resale Statistics

San Fernando Valley single-family home median price hits record high as sales slow down

Reflecting ongoing demand for housing and confidence in the local economy, the median price of single-family homes hit a record high during May even as home sales continued to soften throughout the region, the Southland Regional Association of Realtors reported Thursday, June 27.

A total of 629 homes changed owners last month, a drop of 26.5 percent from a year ago, but up 15.4 percent from the total reported this April.

Condominium sales fell 37.5 percent compared to a year ago to a total of 250 transactions. Condo sales also rose compared to April, up 15.7 percent.

"While there is zero evidence that prices will drop dramatically, the market has shifted in favor of buyers in the sense of offering better choices, more time to negotiate, and credit options that remain generally favorable," said Winnie Davis, president of the Southland Regional Association of Realtors.

"All segments of the market report fewer sales, but the entry level price range is feeling the pinch more than others partly because of stricter rules when it comes to qualifying for a home loan," Davis said. "But that is not necessarily a bad thing."

Stricter loan qualifying rules may, unfortunately, disqualify some buyers whose credit is less than stellar, but that also means there will be fewer problem loans in the months and years ahead.

Relatively few borrowers in the San Fernando Valley are experiencing difficulty making the monthly loan payment or are at risk of losing the house to foreclosure.

Nonetheless, today's tighter loan qualifying standards have a local impact that comes out by way of fewer sales in the entry level price categories.

"The economy is strong and credit remains readily available, yet some buyers are still sitting on the sidelines waiting to see what will happen with the housing market," said Jim Link, the association's executive vice president. "When some prospective buyers finally come to the market they expect to see homes with steeply discounted list prices, yet that is simply not happening."

Instead, Link said, most sellers - especially those who heed the advice of their Realtor - have already adjusted the asking price to current market conditions.

Reflecting the ongoing demand for housing, the median price of the 629 single-family homes sold during May rose 8.3 percent from a year ago to a record high of $650,000. That was up 4.0 percent from the previous high of $625,000 set this April.

The condominium median price of $387,000 was down 2.8 percent from a year ago. The record high of $415,000 was recorded in February 2006.

"Some buyers are surprised when they see that prices are not falling dramatically," Link said. "Foreclosures in other areas of the country may be driving prices down in those regions, but local buyers will be disappointed if they assume it is happening here.

"Parts of California that had alot of new construction, heavy activity by speculators or were primarily catering to buyers who needed to take advantage of low- or no-down adjustable loans to qualify may be experiencing more problems," Link said. "But the housing market in the San Fernando Valley is a mature, balanced market which, so far, is capable of adapting to current market conditions."

There were 6,697 single-family homes and condominiums listed for sale throughout the Valley at the end of May, up 22.4 percent from a year.

At the current pace of sales, the inventory represents a 7.6-month supply, which is only slightly above the 5- to 6-month supply which experts believe represents a balanced market.

The number of active listings often lingered at less than a 1-month supply during the recent sellers' market . At the height of the pure buyers' market of the early 1990's, active listings hit a record high of a 23-month supply.

Courtesy: Southland Regional Association of Realtors

"Over The Fence" Newsletter

I'll be presenting a second associated newsletter to my clients, VIPs and prospective buyers and sellers. You can see a preview at:

• http://www.homewarranty.com/pdfs/signup/27568-English.pdf

July 4th Celebrations

4th of July Celebrations
Sorted by Region and Date:

Santa Clarita Valley
July 4 – Westfield Valencia Town Center, 24315 Town Center Drive, www.santa-clarita.com
Off top of Parking Structure. 9:15pm
July 4 – 25th Annual Independence Day 5K, www.scrunners.org
$30 registration, begins 7am, Newhall Park on Dalbey.
July 4 - The Greens at Valencia will feature an old fashioned 4th of July BBQ and a live band. Make sure to bring your blanket for later to enjoy prime viewing of the fireworks from the putting course. Please call 661-222-2900 for reservations.
July 4 - City of Santa Clarita Parade, www.scvparade.com, 9:45am
July 4 - Castaic Lake Recreation Area, www.castaiclake.com
Fireworks at Lower Lake Lagoon. Picnic and swim all morning and then enjoy children's rides, games, face painting, jumpers, rock climbers, etc. in the afternoon. Adults will be able to enjoy music, food, craft booths and family games such as: water-balloon toss, potato sack races etc. The Fireworks are the big finale for the day and begin at 9:00 p.m. $25.00 per carload, $5.00 per person walk-in, 5 years old and under are free. No open truck bed passengers will be allowed. Camping and Boat Launches require extra fee
July 4 – Six Flags Magic Mountain, www.sixflags.com; Open 10:30am-10pm. Fireworks after 9pm.

San Fernando Valley
July 4 – CBS Studios, 4024 Radford Avenue, Studio City. www.StudioCityChamber.com
Live music, food and fun with the grand finale fireworks display. Tickets can be purchased at the Studio City Chamber of Commerce, Studio City Farmers Market or Studio City Hand Car Wash. Adults are $15.00 in advance or $20 at the entrance. Children (12 & under) $8.00, Children (5 and under) free. VIP Tickets $100.00. 5 p.m. - 9 p.m.
July 4 – Hansen Dam, 11770 Foothill Blvd., Lake View Terrace, www.hansen4th.com
9:00 p.m. Parking $3. For information, call (818) 768-1128.
July 4 - Porter Ranch, Shepherd of the Hills Church, 19700 Rinaldi St. 9:00 p.m. For information, call (818) 831-9333.
July 4 – El Caballero Country Club, 18300 Tarzana Drive, 9pm
July 4 – City of San Fernando, Recreation Park, 205 Park Avenue, Fireworks at 9pm, For information, call (818) 898-1201.

Antelope Valley
July 4-AV Fairgrounds. The annual July 4th Celebration is free to the public and gates will open at 6:30 p.m. Musical entertainment begins at 7:30 p.m. Grandstand seating will be available on a first-come, first-served basis. The fireworks show will begin at 9 p.m. For information, call (661)723-6077.
July 4 - Jet Hawks Stadium, 6:30 p.m.

Elsewhere
July 2,3,4 - Hollywood Bowl, www.hollywoodbowl.com, 7:30pm
July 4 – Dodger Stadium, 9pm
July 4 - Rose Bowl, www.rosebowlstadium.com, 12noon-9pm
Admission is $12 per person, Children 7 and under are free, active military with ID admitted free (up to 4 per family) available only at the Rose Bowl Box Office. Tickets go on sale via Ticketmaster Tuesday, May 30. Call (213) 480-3232 for tickets, or ticketmaster.com. Tickets may also be purchased at Rose Bowl Box Office. $20 per car payable as you enter the parking lots includes $5 off coupon for food & drinks inside the stadium. Festival gates open at noon, fireworks at 9 p.m.
July 4 – Queen Mary, Long Beach, www.queenmary.com, 10am-10pm

Ten Reasons to Buy Real Estate

Ten Reasons to Buy Real Estate

1. Appreciating Asset
2. Tax Write-off
3. Improvable Asset
4. Renting is a Short-Term Advantage, While Owning is Long-Term, Toward More Benefits and Being Wealthier.
5. Credit Scores of Home Owners are Higher!
6. Leverage Your Home.
7. No Landlord! 15 Day Grace Period for Mortgage Payments.
8. Capital Gain Exclusion.
9. Real Estate as an Inflation Edge.
10. Home Ownership Builds Wealth in Two Ways:
a. Through the "Forced Savings" of Paying Down a Mortgage, and
b. Through Appreciation - the Rise in the Home's Value Over Time.

- RealtyTimes.

Finally! The Difference Between a Condo and a Townhouse!

I know buyers always get condos and townhomes confused. Our MLS doesn't make it any easier in considering that a townhome is a "single family residence," and a condo is a separate category.

Here's the dirt: Condo unit owners own the inside of their units. Townhouse owners own the complete unit, including exterior surfaces and the land on which the unit is built. A single family residence is a category including attached and detached homes that the homeowner owns the land the home sits on.

I thought this was nice and easy to remember.

Housing Market at a Glance: Signs the bottom is now.

Signs of Stabilizing Housing Market

Based on First Quarter 2007, Housing data shows a broad stabilization. Essentially, the existing-home market is stabilizing in a broad cyclical trough and moving in the right direction, with a modest gain from the fourth quarter. During the real estate boom, conditions changed fairly rapidly. Observers now need to be a bit more patient to see a slow, gradual recovery, which should start in the second half of this year. In the West, the existing-home sales pace of 1.28 million units fell 11.9 percent from the first quarter of 2006. After Wyoming, the best performance in the region was in Colorado where sales rose 0.8 percent from a year earlier. The median existing single-family home price in the West was $336,200 in the first quarter, down 1.8 percent from a year ago. The strongest increase in the West was in the Salem OR area, at $221,600, up 15.6 percent from the first quarter of 2006.

Housing Projections NationallyNational Association of Realtors expects the following in home sales this year:

• Existing-home sales are likely to total 6.29 million this year and 6.49 million in 2008, compared with 6.48 million last year.


• New-home sales are projected at 864,000 in 2007 and 936,000 next year, lower than the 1.05 million in 2006.


• Housing starts should total 1.46 million units this year and 1.52 million in 2008, down from 1.80 million last year.

If it weren’t for a favorable economic backdrop, housing would probably have a hard landing. As it is, we see this as a soft landing with home sales rising gradually in the second half of the year and prices recovering a bit later.”The 30-year fixed-rate mortgage should rise slowly to 6.5 percent by the fourth quarter, NAR predicts. Last week, Freddie Mac reported the 30-year rate was 6.16 percent. We’ve already seen this in comparing March 2007 numbers with April 2007 numbers in Fast Facts.The national median existing-home price is forecast to slip 1 percent to $219,800 this year, and then rise 1.4 percent in 2008. The median new-home price is expected to be essentially unchanged at $246,400 in 2007, and then rise 2.2 percent next year.



New Home Sales Surge in April Nationally

Sales of new single-family homes jumped 16.2 percent in April, the largest increase in 14 years, but the median price fell 11.1 percent, marking the largest one-month decline on record, according to the U.S. Commerce Department.
''What you're seeing is the blue-light special,'' says Pat McPherron, an economist with Moody's Economy.com. ''The only way this market is going to move is by price cutting.''The strength in new-home sales was led by a 27.8 percent increase in the South. Sales were also up in the West by 8.5 percent and in the Northeast by 3.8 percent. In the Midwest, sales fell 4 percent. Meanwhile, April's median new-home price of $229,100 made the record books as the largest-ever month-over-month decline, as well as the biggest year-over-year drop (10.9 percent) since 1970.

Northern Los Angeles County Focus
Home sales decreased 27.8 percent in April in California compared with the same period a year ago, while the median price of an existing home increased 6.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

As of print time, the Southland Regional Association of Realtors, whose area covers San Fernando and Santa Clarita Valleys, has not released April 2007 data. Data from the prior quarter shows that single-family home prices over the quarter have dropped 3.3% versus last March (down 6.4% for the 1st quarter overall) in the Santa Clarita Valley and that inventory increased 14.6% from last year – representing a 5.5 month supply, which is considered a balanced market, where both the buyer and seller have influence on prices and transactions. In San Fernando Valley, prices down 1% versus last March and inventory up 27.6% to a 5.2 month supply.

In the Antelope Valley, the Greater Antelope Valley Association of Realtors notes active listings rose about 67% from May 2006 to May 2007 with an 8% decrease in list price. The latest sold stats available are for First Quarter 2007, showing Units sold decreased 58% 2007 from 2006 and Sales Price increased 4% 2006 to 2007.

Expectations
The LA Times in its article of May 16 states “Southern California home sales plunged to a 12-year low in April, suggesting that the region's real estate slump is far from over.” I believe this conclusion is contrary to the data shown from my discussions with California Assocaition of Realtors economist Robert A. Kleinhenz. His data shows that we are at a nadir in home prices and to expect a strengthening market by 2008.

It shows how hard it is to get good information through all different sources vying for our attention. It sometimes frustrates me to see premature conclusions that are different from how I see the market. But only time will tell.

I have supporting documentation from Dr. Kleinhenz for his statements and the latest trends from the Valleys from Southland Regional Association of Realtors available – just email me.

Mortgage rates are already showing increases through May (see Fast Facts column), but they are still at historically low levels. The Federal Reserve, which sets short-term interest rates, are meeting at the end of June. Most analysts believe they will not change rates at least through the fourth quarter of 2007. Remember Federal Reserve rates do not directly affect mortgage rates, which are adjusted in step with U.S. Treasury Bonds and other bond rates.

Courtesy: National Association of Realtors, REALTOR® Magazine Online, The New York Times (05/25/07), Los Angeles Times (05/16/07)