Foreclosures continue to rise in Los Angeles County, although Santa Clarita foreclosures still remain relatively low compared to the surrounding areas.

Foreclosure auctions (trustee sales) continue to rise in Los Angeles County for the 3rd quarter of 2008, increasing 9% compared to the previous quarter according to data provided by PropertyShark. Foreclosures from 2007 vs 2008 for the 3rd quarter are up 196%.
The most foreclosures in Los Angeles County were by Countrywide, followed by Washington Mutual. The Palmdale/Lancaster areas continue to top the list of foreclosures, with Sylmar near the top of the list as well. Palmdale’s zip code 93550 has the highest rate of foreclosures, at a rate of one in every 45 homes. Lancaster’s zip code 93535 follows close behind, with one in every 46 homes in foreclosure. The Top 15 zip codes in Los Angeles County for the 3rd quarter of 2008 are below.

Los Angeles County Foreclosures 3rd Quarter 2008

Santa Clarita’s foreclosure hot spots continue to be Canyon Country zip codes 91351 and 91387, with over 100 foreclosures during the quarter for each zip code. This puts these zip codes at rankings 35 and 36 of the top foreclosure zip codes for Los Angeles County for the 3rd quarter of 2008. Remember that each zip code can have significantly more or less homes than surrounding zip codes, so while Valencia’s 91355 has 53 foreclosures for the quarter, that’s only about 0.5% of the total homes in the area.

Santa Clarita Foreclosures 3rd Quarter 2008

 

Santa Clarita single family home sales statistics for August 2008 and 2007

The Santa Clarita real estate market is showing some signs of recovery, with new escrows for single family homes for the month of August up by 120 vs August 2007, and active listings down by 619. New listings were 348 in August 2008 vs 506 in August 2007, for a decrease of 158. The ratio of new escrows to new listings has improved as well, with the number of new escrows representing 75% of the number of new listings in August 2008 vs 28% in August 2007.

Homes are still taking some time to sell, with average days on market at 115 days in August 2008 vs 90 days in August 2007. This is partly due to short sales, which generally remain as active listings until an offer is accepted by the bank. This approval process can take 30 days or more, depending on the bank (or banks) involved.

Sales were relatively constant, with 199 sales in August 2008 vs 186 sales in August 2007. However, the median price of single family homes sold was down by $200k in August 2008. However, this number may be a bit misleading, since the median price is affected by both the price level of homes sold (lower priced vs higher priced) as well as the price reductions that have taken place in this timeframe.

The good news is that homes are selling, and that investors are starting to jump back into the Santa Clarita real estate market. The not-so-good news is that a lot of these homes are short sales and bank owned (REO), which is an indicator that there are still some troubled homeowners out there. However, the percentage of truly troubled homeowners (meaning that they have a true financial crisis) vs the homeowners who just want to “bail” so they can buy a larger home at a lower price, is hard to determine. Also hard to determine is the number of homeowners who are having trouble making mortgage payments due to “resets”, or mortgage rate adjustments, vs those who did cash-out refi’s for $200k or more and now want to walk away from that free and clear via the short sale process.

Santa Clarita Valley real estate sales for August 2008 continue to show median price declines from the previous year in most areas.

While the majority of the Santa Clarita Valley continues to show median price declines for August 2008 as compared to August 2007, the number of homes sold is showing some improvement. Investors are starting to buy homes again, and many Realtors are reporting that they are receiving multiple offers once again. In addition, many of the banks have finally put systems in place that make it possible to get final approval of a short sale in 30 days or less, so more of these distressed properties are being sold.

Acton had a surprising 24.4% increase in the median price of homes sold in August 2008 as compared to August 2007, and Castaic had the smallest decline for the remaining part of the region at only 4%. Canyon Country’s zip code 91351 had the largest decline in the Santa Clarita Valley at 45.7%, and also the area’s lowest median price at $282,000.

The table below shows single family home sales only, with the percent change in median price between August 2008 and August 2007. Remember that the median price is determined somewhat by the price range of homes that have sold, where a larger number of lower-priced homes sold will bring down the overall median price. Jumbo loans, or those over $417,000, continue to decline in the Southern California region.

According to DataQuick, a total of 19,366 new and resale houses and condos closed escrow in Southern California in August 2008. That was down 4.7% from 20,329 in July but up 9.1% from 17,755 in August 2007.  So does this mean that the Southern California real estate market is recovering? “Some expect prices to bottom out soon, too,” says John Walsh, DataQuick president. “That may happen, but history suggests that few of us will time the bottom precisely.”

What about foreclosures? How are they affecting the current statistics? DataQuick reports that foreclosure resales made up 45.5% of all Southern California resales last month, up from 43.7% in July and 10% a year ago. These figures represent the percentage of homes resold in August that had been foreclosed on at some point in the prior 12 months, and exclude short sales or preforeclosures. Foreclosure resales were highest in Riverside County, at 65.2% of resales. Riverside County also shows the largest overall sales increase in the Southern California region, driven mainly by bargain hunters picking up bank-owned (foreclosed) properties.

Many homeowners in the Santa Clarita Valley are asking about whether they should consider a short sale or not.

So you’ve found yourself upside-down on your house, where the mortgage balance far exceeds the current market value, and you can no longer afford the payments. What do you do?

Your options include 1.) stay put and wait for the market to recover (historically the real estate market goes in cycles); 2.) walk away and let the bank take the home through foreclosure; 3.) buy a lottery ticket and pray that you win; or 4.) consider a short sale.

What is a short sale? In a nutshell, a short sale is when the bank agrees to settle your mortgage(s) for less than the home is worth. You list the home for sale as though it is a regular sale, but with a “short sale addendum” that explains that the bank must approve the sale before it can be completed. The bank will generally pay for all fees and costs associated with the sale, including real estate commissions, escrow and title fees and property tax prorations. Often they’ll also pay for delinquent property taxes and homeowner’s dues as well.

Don’t expect to walk away with any proceeds from a short sale - the bank is already taking a loss, and they’ll not be letting you put anything in your pocket from the sale of your home. However, whatever you owed on the home is most often eliminated without recourse, no matter what those funds were used for.

So why do a short sale instead of just letting the bank take your home through the foreclosure process? Your credit score takes less of a “hit” with a short sale than it does with a foreclosure, and your neighbors don’t have to ask why there are notices posted on your windows and local law enforcement pounding on your door as your home gets scheduled for the foreclosure auction. You also have at least a small amount of control over your move-out date in a short sale, where you don’t with a foreclosure.

The short sale process can be relatively long, although some banks are becoming much more efficient lately and quite often we’re seeing approvals within 30 days from the date a buyer’s offer was submitted. Be prepared to provide the bank with information as to your current financial situation (income and assets), as well as a hardship letter as part of the short sale process. Also, be sure to hire a Realtor who is experienced in short sales… short sales take a lot of extra jumping through hoops and follow-up, and a file that is not prepared properly will just get sent to a deep, dark corner somewhere never to see the light of day.

Need help with a short sale? Call Santa Clarita Realtor Linda Slocum at 661.670.0349.

Foreclosures in the Los Angeles area declined in August 2008, but still remain high.

The Top 15 zip codes in the Los Angeles area for August 2008 finally show some movement in the Palmdale and Lancaster areas, giving way to the San Fernando Valley for two of the Top 5 slots for the highest number of trustee sales (foreclosures) for the month according to PropertyShark.

Most of the foreclosed homeowners obtained loans in 2005, 2006, or the first half of 2007. Many of these were cash-out refi’s, not original purchases.

If you’re behind on your mortgage payments and likely facing foreclosure, it’s best to consider listing your home with a reliable Realtor® as a short sale instead. The impact on your credit report will be less, and you’ll have a bit more control over your destiny, since you’ll generally be able to extend your auction date and have time to find a new place to live. We’ve been finding that the banks are becoming much more cooperative on short sales as they establish the staffing and policies required to process these more efficiently. Need help? Call Santa Clarita Realtor Linda Slocum at 661.670.0349.

Home sales activity increases in Santa Clarita as inventories continue to decline.

Santa Clarita real estate inventories continue to decline, as well as median prices in most areas.

An analysis of home sales activity by zip code shows that the inventory of homes in most Santa Clarita areas increased somewhat between March and April and then started a declining trend.

The current week’s statistics show relatively flat median prices and prices per square foot, declining days on market, and declining inventories. This is still a buyer’s market, although sellers are seeing much more activity than before, including the return of multiple offers.

According to the Southland Regional Association of Realtors (SRAR), an upward Santa Clarita sales trend started in April, when a total of 178 homes changed owners, up 2.3 percent from a year ago and 17.9 percent higher than the March tally. Sales had been trending downward since hitting a record high of 405 transactions in June 2005, but the April total was the first time since March 2007 that the total was higher than 12 months ago.

At the end of April there were 381 open escrows, up 34.2 percent from the prior year and 24.1 percent higher on a month-to-month basis. Activity has been steadily rising since hitting bottom in December when there were a mere 160 open escrows. The record high for open escrows was set in March of 2005 at 662 open escrows.

SRAR has not yet released the sales statistics for May 2008, but the live data on the charts above show that the inventory of homes for sale continues to decline as of the date of this post (June 15).

For more live data on Santa Clarita’s real estate activity, either click here or click on one of the graphs above. Be sure to sign up for our Weekly Market Updates, which provide detailed statistics and trends for real estate in your area.

LandSource and certain subsidiaries, including Newhall Land and Lennar, have filed for Chapter 11 bankruptcy protection.

Newhall Land (Lennar) announced over the weekend that they have filed Chapter 11 bankruptcy, which really comes as no surprise.

Does this mean that all of their current and proposed Santa Clarita new home projects, including West Creek and West Hills in Valencia, RiverVillage and Newhall Ranch will be permanently mothballed? Likely not.

The Chapter 11 filing creates the means for Newhall Land to restructure its debt so they can move forward. LandSource, the parent of Newhall Land, has apparently secured a new line of credit from Barclay’s Bank for $135 million.

We’ve been watching Lennar’s struggles in the Santa Clarita real estate market as they halted the sales of the Mosaic and Patina projects in Valencia’s West Hills as well as the Artisan and Claridad projects in Valencia’s West Creek in November of 2007. They opted to consolidate their efforts into the Artenati and Patina developments at West Creek, the Castillo development at West Hills, and the RiverVillage project instead of continuing with the projects that had lower sales at that time.

Lennar sold a 62% share in the Newhall Ranch development at the beginning of 2007 to MacFarlane Partners, with California Public Employees’ Retirement System (CALPers) as one of its biggest investors. Lennar retained a minority interest in the Newhall Ranch project as well as the rights to collect management fees. Lennar also posted its first quarterly loss in 10 years at the same time, largely due to property value write-downs.

Buyers have been benefitting from the price reductions and buyer incentives that Lennar has been offering in recent months, including interest rates "fixed for life" in their current promotions at 5.25% on standing inventory. On the back end, buyers have been enjoying builder-paid closing costs as well as prepaid HOA dues and other incentives. With these incentives as well as the the interest rate buy-downs, many buyers are finding that they need little out-of-pocket funds to buy a new home, so Lennar’s strategy is clearly working. They are definitely selling homes in the West Creek, West Hills and RiverVillage developments, and their standing inventory in the Santa Clarita area is close to zero.

Reminder: If you are considering buying a new home from Lennar, be sure to have a qualified Realtor accompany you on your first visit to the sales office. There are often unpublished incentives that will only be available if you ask for them. Don’t have a Realtor? Contact Santa Clarita Realtor Linda Slocum at 661.670.0349 or send her an email.

After a lull in foreclosure activity, Los Angeles County experiences foreclosure surges in April and May.

The start of 2008 looked promising on the foreclosure front, but the April and May numbers indicate that foreclosures in the Los Angeles area are far from over.

Before you freak out too much over this foreclosure spike, remember this: All real estate is LOCAL. Repeat after me: "All real estate is LOCAL!"

The Top 15 zip codes from Los Angeles County look pretty much the same month after month… if you live in Palmdale, Lancaster or Quartz Hill, the real estate market isn’t looking very pretty right now. Of the 1,460 total foreclosures in the Top 15 zip codes, 820 are in these areas, or over 56% of the Top 15. The remaining eight zip codes in the Top 15 all have 100 or less new foreclosures (as in foreclosure auctions, not NODs) for May. The chart below, courtesy of PropertyShark, shows all Los Angeles County foreclosure auctions from May 2006 through May 2008.

So how is Santa Clarita real estate faring through all this? Here’s a quick run-down of the foreclosure numbers for May 2008:

No real suprises here for those who have been following the Santa Clarita foreclosure trends. The lower priced homes make up the largest number of foreclosures throughout the Santa Clarita area, so Canyon Country has been hit pretty hard compared to the rest of Santa Clarita. Remember that the amount owed on these is not necessarily the entire picture though - these numbers are just the mortgages being foreclosed upon, not the 2nds (and 3rds and 4ths) that were written off during the foreclosure process. 

What happens with homes that are bought through these foreclosure auctions? If they’re upside-down (the mortgage is higher than the home is worth), then it’s likely that the bank took back the home. For those that are now bank-owned, or REO, expect to see them on the MLS sometime soon, if they aren’t there already, at competitive prices.

Don’t confuse these bank-owned homes with short sales… with bank-owned properties, the bank now has full ownership and needs to sell.

With short sales, the current owners are playing "Let’s Make a Deal" with the bank, so they are not guaranteed sales, nor are they guaranteed to sell at the prices you see on the MLS. In fact, many of the short sales are listed on the MLS at "come-on" prices meant to encourage buyers consider writing offers, and are nowhere near what the banks are willing to accept. Once an offer is in hand, then the lengthy process of negotiating with the bank will begin, often lasting up to 6 months only to fall out because the buyer and the bank are a mere $6,000 apart. Remember that the bank is not obligated to agree to a short sale - they can take the home back at the foreclosure auction and re-market it themselves at a price of their choice.

Interested in exploring foreclosures and short sales? Call Santa Clarita Realtor Linda Slocum at 661.670.0349 or send her an email.

Instant online reports for your neighborhood, with charts, graphs and local amenities.

If you’re thinking of moving to Santa Clarita, one of the first questions you may be asking is "What does this area have to offer?" Common concerns include the demographics of an area, nearby schools, shopping and other amenities, household income, weather, and cost of living.

With our new Neighborhood Reports, you can get an instant online report that includes the following information:

• Community Amenities: Shopping and grocery stores, churches, schools, arts and entertainment, food and drink, recreation and leisure.
• Community Characterstics: Including population turnover, nearby airports and nearby colleges.
• Population: Density and demographics
• Households: Number of homes, married, single, average household size, households with children
• Housing: Median price, turnover, average number of years in the same house
• Transportation: How people get to work
• Income: Median income, average income, disposable income, sales tax rate
• Employment: Industry and occupations
• Net Worth: Median, average, and median home price
• Cost of Living: By detailed category
• Climate: Annual highs and lows

Here’s an example of the Households section for zip code 91354 in Valencia:

To get your Neighborhood Report, click here and enter the zip code that you’re interested in.

Lennar's Santa Clarita developments in West Creek, West Hills and RiverVillage offering new incentives.

Get out your Secret Decorder Ring again, folks… Lennar’s offering new incentives for Santa Clarita home buyers, but you’ll need to know the secret before they’ll give them to you!

New incentives from Lennar include 1% off the list price of homes as well as interest rate buy-downs and other incentives, including paying for closing costs and upgrades in many situations. They are offering 5.25% "for life" for qualified buyers on certain homes as well, which could very well allow some home buyers to afford the home they want instead of the home they’d have to settle for otherwise.

These incentives are offered on homes at Valencia West Creek and West Hills as well as the RiverVillage (River Village) development. Feeling a little unsure about jumping back into the Santa Clarita real estate market? With these added incentives, including interest rate buy-downs, it may be worth a second look!

Whats the catch? None, really, other than jumping through a few extra hoops to get these deals. You won’t get them by walking into your nearest sales office, nor will you get them if you’ve already registered as a potential buyer with Lennar. Well… scratch that and rewind a bit… they may give you some of these new incentives as an already-registered buyer if you go about it correctly.

Now for the fine print… your Realtor needs to register you at the Lennar sales office on your very first visit (don’t go there alone, even "just to look"), and your Realtor needs to jump through a few extra hoops before meeting you there. Shhhhh… I know the secret…. call me at 661.670.0349 or email me (Santa Clarita Realtor Linda Slocum) and I’ll make sure that you get all available incentives and discounts.