I get asked a lot by those in the industry, and those supportive services that we employ, what is happening to the Santa Clarita real estate market?
There are a few factors to look at, but three big ones to unpack. One that is typical and a couple which are not so typical.
BTW, I'm Connor T. MacIvor and I have been representing home sellers and buyers in the Los Angeles Areas since 1998. During that time we have been Santa Clarita residents and have been working hard to earn and to keep our real estate clients trust. When you are ready to make any real estate decision I will be here for you and yours. I am Santa Clarita home experts and I can be called or texted at 661.400.1720.
On with today's Santa Clarita real estate blog adventure.
Tonight I was at Ralphs in Granary Square. I love that store, as much as I love Whole Foods. But Organic? What is that all about and what proof is necessary to prove something is organic? Not much per what I have read. But that is another story.
While in Ralphs, I ran into one of our Virtual Tour Representatives, she asked very pointedly, "What the heck is with the real estate market?"
Well I said, it has to do with three things.
The Reduction of Interest Rate Backfire.
Change of Season.
Wow - did I hit a nerve?
There are some that would tune out now. No more reading, I'm out!
Hold on - give me a second to see if I'm even hitting close to the 10 ring.
A few months ago - From October 22, 2019, the last meeting of the FED reduced interest rates. That was thought to give the market some stimulation.
However, the entire real estate market turned A - Sexual and started to refinance. The sellers that were on the fence about selling and moving up, at a huge percentage, decided to refinance and to stay put.
Can you blame them? The stock market seems to be running the show these days. There is little room for the real estate market. The Real estate market is one of the top three tangible assets. Gold, Silver and Real Estate.
When the stock market goes awry, then the tangible items become more invested in.
However, why deviate from the stock market, it's leaps and bounds above real estate at the present time.
During the Obama Years, real estate was booming. During the first part of the Trump Years, the same. But, those on either side of the fence will point blame to all they can to justify their point.
Me, I'm not wanting to assign any blame. Some presidents leave in a crappy economic downswing when the next president arrives on the scene during a time when the economy is ready to be stimulated and rise above past success markers.
Remember, timing is everything and a little luck does not hurt either!
The bottom line is real estate is responding negatively to the lower interest rates, where sellers in the Santa Clarita Valley decided to refinance and stay put, other than put their homes onto the market to give the home buyers something to buy.
Our real estate inventory is staying very low, It's taking longer to sell homes, and we are entering another season which has not been historically kind to real estate and the markets.
That season - The Fall and Winter months where the Big Holidays lie. We have already had our Black Friday in real estate.
In the non-real estate related world, the next Black Friday is coming to us the Friday after Thanksgiving.
So what happened when the mortgage interest rates were lowered? The talk on the street was that the lowering of interest rates was going to motivate home buyers. It was also going to Get sellers to get off of the fence to get their homes listed for sale.
It did not play out as was expected. Sellers refinanced their mortgages. The lenders became so busy with refinances, they had very little time to pay attention to the buyers that wanted to buy homes. (aka origination loans or new loans).
We watched some of the lenders that we don't work with start to pay more attention to their refinances that they had going on than the clients who were working with them. It was taking longer to get the "usual" lending things done.
The home buyers slowed down due to the housing market prices and the cost to go to a month to month lease. The leases came due, they did not see the homes in comfortable numbers for sale, so they decided to re-up their lease for another year.
Don't get me wrong, there are still sellers and homebuyers in the market. The market has not stopped completely. We are still very active with buyers and sellers, but the Santa Clarita real estate industry, as a whole, has slowed down.
It's taking longer to sell the limited inventory that we have on the shelf. New homes and new builder communities are also noticing it's not as easy as it used to be to sell new housing.
Plus, as already mentioned - the inventory numbers are not increasing, and they won't until next Mid March - 2020.
During the holidays, there will be listings entering the housing market in the Santa Clarita Valley, but they will not be breaking any records.
Homebuyers will still be buying through the holidays also, but no trophies for spectacular closing numbers won't be given.
The interest rates were supposed to increase inventory, the reductions were supposed to make buyers start buying and sellers start selling, that was not the case.
October 28, and 29, 2019 - the FED is meeting again. Let's see where interest rates go then? Will it be enough to kick off another refinance volley? If they get to 2% as some have rumored, it will. That act will also do that the last interest rate reduction was supposed to do, make sellers want to sell and move and buyers want to buy.
Have you noticed when the stock market is doing great, real estate takes the back burner?
It seems to happen that way. It also seems to be the case when a republication is a president the stock market is crazy.
However, it seems to me that, for whatever reason, at least during the past few presidents, when a Democrat is in office, the real estate market is hopping. One way or the other, but it's moving. Not like today, slow and stagnant.
Real Estate prices are up, higher than the last height which we experienced last quarter of 2006 in the Santa Clarita Valley.
When the stock market gets strange and when it starts to look as if it's crashing, guess what? The real estate starts moving. Tangible assets - assets you can hold, not paper stocks, start moving. Gold, Silver and real estate - they start flying off of the shelves.
I know I'm jumping around, but I want to make sure I cover all points.
The election of 2020, the market from now till then. If the interest rate gets lower, real estate will start moving, but it will move forward at the speed of an elephant and not a cheetah.
Right now we have these factors tied to the "time of year" in real estate. Generally, it's slow during the final quarter and about 2/3rds of the 1 quarter of any year.
We have seen this typical yearly trend in real estate in the Santa Clarita Valley since I became a licensed real estate agent.
While I have been at the job of representing buyers and sellers of real estate since 1998, there have been a few elections and in an election year, it does pause the market doubly so during the holiday season.
Have I covered everything I promised?
If not hit me up in the comments.
Finally, what about me using my crystal ball to venture into the future. I'm the sort of person who loves the now. I don't look back very often unless it is to learn and I look forward only to plan. I have noticed that if I venture too far off course, my life becomes lacking thanks and gratefulness.
This year will continue to be slow, interest rates will stay put, and the market will not go into recession.
During Q 1 2020 - real estate listings will outpace buyer drive and we will continue to have longer days on market timeframes than we have seen in the Santa Clarita Valley leading up to August 2019.
Late Spring 2020, we will the buyer drive in Santa Clarita real estate will start to pick up and absorb those listing at a reasonable discount from listing prices.
During the summer into the Fall, the market in the Santa Clarita Valley will be hot due to the low-interest rates, which will have continued since 2019 and the heightened inventory where long-time sellers will need to sell.
Real Estate representation has been great for me and for our business. There are so few who will say it how it is.
When you are ready for anything that is real estate. This is our system when it comes to online Santa Clarita real estate.
I will be here for you and please be safe.
I'm Connor with HONOR. Talk soon.