Following several months of improved activity, existing single-family home and condominium sales in the Santa Clarita Valley during September slowed due to seasonal forces and ongoing consumer uncertainty regarding the economy, the Southland Regional Association of Realtors reported on Monday, Oct. 24.
A total of 164 homes changed owners, down 1.8 percent from a year ago, while the 66 condos that closed escrow were off 7.0 percent. While 60 percent below the peak of the boom market, both have been trending higher since hitting their respective lows for this cycle in January 2008, with the home tally up 65.7 percent and condos up 112.9 percent.
“There are some people who are taking this seriously, buyers and investors who are reaping considerable benefits in terms of price and interest rates,” said Sal Aranda, president of the Association’s Santa Clarita Valley Division. “There also is a cadre of prospective buyers who worry that the economic recovery is proceeding too slowly, that unemployment remains too high, and that government has done little to prod lenders or help current homeowners.”
Aranda believes the pace of local home sales will be steady through the end of the year but that the market will remain in the doldrums until lenders come forward with reasonable loan qualification standards.
Aranda also believes construction of new homes is picking up in the Santa Clarita Valley with attractive packages luring buyers and brokers who otherwise would be focused on the exceptional value in existing housing.
“The $360,000 that used to get a condominium today captures a single-family home,” Aranda said, noting that interest rates on home loans have settled in the low 4.2 percent range.
The $360,000 median home price posted this September was down 12.2 percent from a year ago, yet still ahead of the record low for this cycle of $346,000, which was set in January.
The condominium median of $195,000 was 11.0 percent below September 2010, establishing a new low for this market downturn.
“Clearly, there’s a demand and backlog for housing,” said Jim Link, the Association’s chief executive officer. “Yet as the political rhetoric increases, solving housing issues seems to be taking a back burner.
“It doesn’t make sense,” he said, noting that “until Congress decides to fix the secondary mortgage market and focus on jobs we’ll see only incremental improvement.”
Little is being done, he said, to loosen up lending requirements that prevent ready and willing buyers from owning a home, which, in turn, would further stabilize prices, thus helping the estimated 2.1 million Californian’s who owe more than their home is worth.
Both noted improvements in the pace of processing short sales, yet the persistent overhang of foreclosures depresses prices and fuels consumer uncertainty.
Even with the doubts, the Santa Clarita Valley market is relatively robust compared to other communities with pending escrows — a measure of future sales activity — supporting Aranda’s view that the market will be busy through the end of the year. The 358 open escrows reported at the end of September were up 4.1 percent from a year ago.
There were 1,093 active listings throughout the Valley, down 12.5 percent from September 2010. At the current pace of sales, that represents a 4.8-month supply, just shy of the desired 5- to 6-month supply indicative of a balanced market.
The Southland Regional Association of Realtors® is a local trade association with more than 10,000 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.