Santa Clarita Real Estate Trends Update for August, 2009

Santa Clarita real estate inventories continue to decline as summer comes to a close.

It’s interesting to review the Santa Clarita real estate trends once in a while to get a good overview of how our local real estate market is faring in contrast to what the media would like us to believe. Remember that all real estate is local, and the trends that we see in Santa Clarita are not necessarily the same as what we’ll see in the entire Los Angeles County or Southern California areas.

When we look at median prices for single family detached homes sold in Santa Clarita during the last year (including Canyon Country, Castaic, Newhall, Saugus, Stevenson Ranch and Valencia), we see that the median price has only gone down by 9% as compared to August 2008. Median prices for single family detached homes was $410,000 in August 2009 vs $450,500 in August 2008. The median prices is defined as the middle value in a range of sold prices, i.e. half of the properties sold for more than the median price and half sold for less.

Meanwhile, the number of homes for sale in the Santa Clarita Valley has declined significantly from August 2008 to August 2009, with a whopping 51% decline in the housing inventory for single family detached homes. For purposes of this graph, the number of homes for sale represents the number of homes that were available for buyers to purchase during the month, not the number of homes for sale as of the last day of the month.

While the number of homes available for sale has been declining, the number homes that are under contract has been increasing by about the same ratio. As of August 2009, there were 47% more homes under contract than there were in August 2008. This is largely due to the lengthy process involved in getting short sales approved and closed, since it can take months for the bank to approve the short sale, and then it typically takes another 30 days after approval for the buyer to close escrow.

Short sales also skew the data for the number of homes available for sale, since many Realtors are still not in compliance with the MLS rules stating that a home should be removed from ‘active’ status when the seller signs a buyer’s purchase agreement and submits it to the bank for approval of the short sale. This means that the number of homes for sale is an inflated number, and that buyers are wasting their time looking at homes that are already under contract.

The months supply of inventory represents how long (in months) it would take to sell the remaining inventory at the present (monthly) sales rate. With the months supply of inventory at only one month as of August 2009, that means that at the current rate homes are selling there will be no homes for sale within one month if no more homes are listed for sale. Admittedly this is somewhat of a narrow-minded view of the inventory situation, since not all homes listed for sale will sell during the next month without price reductions or other changes, but statistically there is only one month’s worth of homes available for sale as of the end of August 2009. This is quite a change from August 2008, where there was a 7-month supply of housing inventory. And, assuming that many of the homes showing as available for sale as of August 2009 are short sales with contracts already submitted to the bank, the months supply of inventory is actually lower than calculated.

If you’re looking to purchase a home in the Santa Clarita Valley or if you’re thinking of selling and want to see what homes are selling for in your neighborhood, you can search for homes using our handy neighborhood search tools. The low inventory of homes for sale means a higher demand for the homes that are available for sale, so don’t expect well-priced homes to be available for very long.

Santa Clarita Realtor Linda Slocum is a Certified Distressed Property Expert (CDPE) specializing in Santa Clarita residential real estate and short sales. You can reach her at 661.670.0349 or at Linda@SantaClaritaRealEstateBlog.com. Data is extracted from the SoCalMLS and is deemed reliable, but is not guaranteed.