Slaying the Housing Dragon: Home Sales Increase in Santa Clarita as Foreclosures Continue

Santa Clarita single-family home sales continue to increase as inventories begin to drop.

Single-family home sales in the Santa Clarita Valley were up by 10.1% in 2008, with total sales of 2,194 vs 1,993 homes sold in 2007. Bargain-hunting buyers, whether purchasing homes to live in or as investment properties, are driving the market with multiple offers becoming very common in certain price ranges. December 2008 sales in the Santa Clarita Valley were up a whopping 68.4% over the December 2007 numbers.

However, with the good comes the not-so-good… Most of the homes being sold are “distressed properties”, which are either short sales or REO’s (bank owned). This means that someone had to be forced out of their home in order for you to pick up a bargain. Granted some people want to be “forced” out of their over-leveraged homes, especially those who refi’d during the hot market and are fully aware they can walk away from loans they obtained to buy vacations and other luxuries. Unfortunately, many people who simply had a string of bad luck, including illnesses and job losses, are being caught up in this tidal wave as well.

The good news is that as lenders continue to be more liberal in granting loan modifications to keep people in their homes, this should mean that fewer families are forced out of their homes and into apartments. There is some speculation that the inventory of bank-owned homes will spike in the upcoming months as banks pull the plug on homes they put in limbo while the Feds decided how to handle the bail-out rules… only time will tell if this is true.

Meanwhile, prices and interest rates remain low, which means that buyers who could only afford a dinky condo a few years ago can likely get into a single-family home instead. The inventory of 1,334 active listings as of December 2008 represented only a 4.8-month supply, with many of those homes being “unsellable” given their current price and condition. This inventory level is a 36.5% decrease from the prior year, and a 10.3% decrease from November. Analysts consider a 5-6 month supply of homes to be a “balanced market”, so this is definitely a good sign.

For buyers looking for a newer single-family home in the under-$400,000 range, the good pickings are rather slim, especially if you’re wanting to avoid the lengthy processing time for short sales. Many of these homes are receiving multiple offers within 3 days after being listed on the MLS, with buyers out-bidding each other eBay-style to get the homes they want.

If you’re a buyer looking to pick up a good bargain, be prepared to see some pretty “icky” homes, since short sales and bank-owned homes are not always in the best condition. It’s best to have a budget in mind for carpet replacement as well as interior paint, and a good maid service isn’t a bad idea either. Some banks are authorizing carpet replacement in order to get their REO homes to move more quickly, but it’s up to the listing agent to get this done, and quite frankly not all Realtors want to go to the trouble of obtaining the bids required for this task.

If you’re thinking about buying a home and are not sure if you have good enough credit, talk to a good lender to find out for sure. Even buyers with no credit or not-so-good credit are getting qualified to buy homes via the FHA programs. Sure, there may be a few more hoops to jump through in the process, but isn’t it worth it to get a home at a bargain-basement price?

Buying a home under the current market conditions requires a lot of patience and persistence, as well as a qualified Realtor to keep the process moving along. With a mixed market comes a mixed bag of hurdles to overcome, including listing agents who don’t understand the short-sale process and appraisers who are making up numbers and low-balling everything just to be on the “safe side”, as well as lenders who are either not up-to-date on the current offerings or just don’t want to fight the dragons to get a loan processed through. Just keep in mind that you’ll be able to do a big Happy Dance after escrow closes on your new home, knowing that you’ve gotten a good deal and possibly even slayed a few dragons in the process!

Looking to buy or sell a home in the Santa Clarita Valley? Contact Santa Clarita Realtor Linda Slocum at 661.670.0349 or email her at Linda@SantaClaritaRealEstateBlog.com.