Homes sales in Southern California area are up 65% for September 2008 as compared to the same period last year.

The good news for the Southern California economy is that homes are selling once again. September 2008 home sales in the Southern California region were higher than in any month since December 2006. and the year-over-year gain was the highest for any month since 1988 according to DataQuick.

Although this increase is astounding, everything must be looked at in context to get the true picture of the real estate market. September 2007 sales represented a record low, since changes in the lending industry had bumped up the rates for jumbo mortgages the month before. And 50% of the homes sold in September 2008 had been foreclosed on sometime within the prior year.

“More impressive was that this September’s sales volume bucked the seasonal norm and rose above August,” says DataQuick president John Walsh. Foreclosure resales by county continues to tell an interesting story, as Riverside County once again tops the list at 68.9%. Los Angeles County is near the bottom of the list this month, with foreclosure sales at 39.1%.

With the higher level of foreclosure resales comes a decline in prices. The median price for the SoCal region dropped to $308,500, which is the lowest since May 2003. However, the median price never tells the complete story, since it is affected by regional price depreciation, relatively slow high-end sales, and the rising market share of foreclosure resales, which tend to sell at a discount. Also, remember that the Palmdale-Lancaster area continues to dominate the foreclosures in the Los Angeles County region. For 3rd quarter foreclosure (trustee sale) stats, click here.

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.

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.

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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.

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