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.

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.

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:

Zip	Area	# of Trustee Sales	Average $ Owed
91351	Canyon Country	55	$348,301
91387	Canyon Country	36	$349,311
91350	Saugus	33	$421,897
91355	Valencia	21	$447,388
91321	Newhall	21	$392,427

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.