Santa Clarita Home Sales increase 23%

Sales of existing single-family homes picked up during May in the Santa Clarita Valley, posting the fifth consecutive month of increases, the Southland Regional Association of Realtors® reported.

Realtors® closed escrow on 220 homes, an increase of 22.9 percent over a year ago May and 23.6 percent higher than the tally reported this April. May also marked the first time since June 2007 that more than 200 homes sold in a single month. Every month since January has seen more homes sold than the prior year.

Condominium sales remained sluggish as prospective buyers preferred to focus on single-family homes that for the first time in years are being offered at favorable prices by owners who are willing to negotiate and make repairs or concessions.

"Sales activity is steadily picking up," said Doreen Chastain-Shine, president of the Association’s Santa Clarita Valley Division. "Agents are reporting that a lot of people are coming through open houses, a lot of people are looking for a home."

Home sales are taking longer and require more work to complete in large measure due to two complications in the market, said Jim I-ink, the Association’s chief executive officer:

First, some buyers misread the market.They fail to understand that each local market is different - Santa Clarita does not have nearly as many problem properties as, for example, communities in the Inland Empire. Plus, lenders trying to sell homes listed through foreclosure or a short sale generally will not accept deep discounts while traditional sellers, especially if they have equity in the home, have little incentive to entertain a price that is drastically lower than the list price.

Secondly, home loans are available, but most loans require a down payment while borrowers must show proof of income and the ability to repay the loan, thus limiting the pool of qualified buyers.

"Buyers should not turn their backs on traditional buyers thinking that a foreclosure or short pay always offers the best opportunity," Link said. "Traditional sales can be completed faster, buyers have more ability to request repairs, and sellers typically are more willing to negotiate.

"Don’t expect to have much, if any, leeway with a bank," he said. "Banks will be much less willing to negotiate than a traditional home seller."

With more activity coming in the lower price ranges, the median price of the single-family homes sold during May slipped by 14.1 percent from a year ago to $450,000.

The condominium median price of $305,000 was down 14.1 percent from a year ago, but up 9.3 percent from the April median.

The market has definitely picked up in the lower price ranges," Chastain-Shine said. "It shows that there is demand."

Pending sales - a measure of future resale activity - increased 19.0 percent from a year ago to a total of 339 open escrows. However, pending sales fell 1 1.0 percent compared to this April.

Surprisingly, the inventory of homes for sale is dropping, hitting levels that are close to levels where industry experts believe the market is balanced between buyers and sellers.

A total of 1,946 properties were listed for sale throughout the Santa Clarita Valley at the end of May. That was down 13.1 percent from a year ago and 3.4 percent lower than April, a time of year when active listings traditionally increase.

At the current pace of sales, the inventory represents a 6.6-month supply. A balanced market appears when the inventory offers a 5- to 6-month supply.

"Despite media reports suggesting otherwise, we’re not seeing a flood of inventory locally," Chastain-Shine said. "I really do believe the worst is past."