Typically 1/2 way through the calendar year, I get to the housing market updates, where Santa Clarita real estate has come and where the data seems to indicate we are going.
Currently, in the Santa Clarita Valley cities here are the YTD stats for the Santa Clarita Cities.
I am compiling the data from Castaic, Canyon Country, Newhall, Saugus, Stevenson Ranch, and Valencia California.
My primary interest is Residential Real estate. I'm looking for the saleable data which will pertain best to the local market research for those who would have an interest in Buying or Selling residential real estate.
Tenant and Rental numbers are relayed to our investor clients in another article with a more appropriate title.
YTD Santa Clarita market recap - 2019
From January 1, 2019, to today, Thursday, July 18, 2019, the Santa Clarita real estate market has had 1906 real estate listings closed escrow. That means that since January 1, 2019, that many homes have sold.
Last year, for the same period of time, that was 2019, 1968 real estate listings sold.
Things last year were sort of like groundhog day, if you have seen the movie, the actor keeps getting up and repeating the same day over and over again.
The biggest change, despite the relatively small difference between 2018 and 2019, the 2019 market is moving a bit slower.
It also seems that this year as been more steady than last. To give you more of a comparison - Let's look to 2017 - to date - from January 1, 2017 - July 18, 2017, The Santa Clarita Valley experienced 2139 homes that closed escrow (sold).
As I ran the calculations for Months of Inventory regarding the Santa Clarita Valley cities, I was surprised to see how "historically slow" the market was moving January of 2019 in comparison with the previous two years.
Months of inventory is another way to reference the absorption rate in real estate. The data required to make this calculation is the rate at which homes are selling and the rate at which residential home inventory is being replenished.
When those are factored into each other, the result is months of inventory aka absorption rate.
If no more homes entered the for-sale market and if properties continued to sell at the very same rate when that change occurred - I would take just a bit over 4.5 months to have the market get to Zero units for sale, if you look at the highest point on the graph, January 2019.
The Santa Clarita Valley has been a fast-paced real estate market for the past few years when it starts to return to a more balanced market - an "in-between" real estate market, people start to panic as if it's been raining.
When a market is in the Seller's Zone - it favors the seller in a lot of ways.
When a real estate market is within the Buyer's zone, the buyer holds the advantage.
When the housing market is in between those types, then the housing market is balanced.
We well may be on our way to a more balanced real estate market where the months of inventory or absorption rate is around 6 months.
As of July 18, 2019, there are only four foreclosure/bank-owned homes on the market within the Santa Clarita Valley. Typically in a real estate market where the number of distressed homes is reduced to a total of 1% or less within the available-for-sale inventory, the market exhibits health.
Today, we are well below that 1% guideline and the absorption rate is also increasing.
Next Year is an election year for the president of the United States. No matter what side you are on, it's going to be quite a show.
Typically when the stock market is strong real estate is not in full stride. However, when the stock market starts to show signs of trauma, people move their money from paper to tangible assets. Such as gold, silver, and real estate.
Things they are able to hold onto.
If 2020 produces a change in the government leadership, remember what I said about real estate versus the stock market.
Currently and for the rest of 2019, I don't believe records are going to be broken either way.
In the Santa Clarita Valley cities, we have over 20 locations where new homes are being sold. Never leave any personal information when viewing. You will give up the right to have an expert new home negotiator on your side. You will be having to deal with the new home builder's representative. You wouldn't use the same lawyer, would you? It's a conflict of interest. Call me and I'll explain 661.400.1720.
Here are some New Santa Clarita home snapshots of the current new home builders who are operating currently Mid-July 2019.
Want to see the new homes with us on a tour?
Fill this out and I, Connor with meet with you personally and be your professional new home negotiator with all new homes and with the new home builder's representative.
You can learn a lot about a real estate market when looking at the activity that is within the new home builders and in those communities.
It seems they have a much better grasp of the overall real estate market. The last foreclosure cycle, I had been a realtor just about 10 years at that time, licensed in 1998.
When the second-largest subprime lender fell, claiming Bankruptcy in March/April of 2007, it was like a house of dominos.
We had transactions in process with home buyers that had to be canceled. Others were able to continue the process, depending on who the lender was.
Also, the market just stopped and then the "experts" came out, who had been silent for the previous 10 years, "We told ya..."
"We have been saying it, the market is going to collapse, we told you..." LOL - they said nothing. Apparently, a foreclosure market affects a person's memory.
But, there they stood in their robes tied around the waist with a string.
The Second 1/2 of 2019 in real estate
Interest rates are low - and getting lower. If you entertain the word on the street, we may get into the 3's before the end of this year, that's 2019.
If that happens you are going to see a real estate firestorm and inventory really start to lower, then within a short time, it will be replenished quickly, causing the housing market to pick up and finish at the first quarter's predictions of a 2-4% increase.
Currently, the "word" is that we are on the way for a 2% decrease, that intel came out via Realtor.com a couple of weeks ago.
Truly, until it's over, no one knows for sure. But it can be spoken about with a certain amount of backup by good historical real estate data.
The biggest problem seems to be the fluctuation within the stock market being so "presendentially" dependent. One thing is said and or tweeted and you have a large tsunami ripple effect that slams into stocks, bonds and rates.
Some of the things that I am going to keep my eyes on is the new home development. The city of Santa Clarita in their infinite wisdom has approved more than 19 new home developments that have been offered up by the new home builders.
I drive to Los Angeles Often - All I'm going to say is I will be able to learn a few other languages with how that commute has become and it won't be getting better. I think the 5 freeway is 5-6 lanes south out of the SCV - the Northbound 5 freeway is only 3 coming up and over the hill to Calgrove. However, the 14 freeway is accessible now that Golden Valley connects with the 14 freeway and the other end of Golden Valley is Newhall Ranch Road - it serpentines throughout the valley and was a true blessing for the commuters. Another insider tip, while I'm talking about them is San Fernando Road access to Balboa and Balboa into the Santa Clarita Valley connecting to The Old Road. San Fernando Road also connects to Sierra Highway at the same point where it turns into The Old Road - Just for your traveling pleasure. But 200,000 new homes in the SCV?
Besides the issues with traffic - when you are ready to buy a home, phone calls need to be made concerning schools and the number of students, if you have school-aged children.
It wasn't too long ago when a client of ours called me and relayed a story about a particular elementary school who turned them away due to the school having exceeded the number of students they were limited to. Of course, she was given the alternative to register her kids at a nearby elementary school and it was close enough where it did not cause any regret related to her choice of home location, she just did not do her due diligence.
There is very little doubt, the Santa Clarita Valley is a great place to live and if you are one who wants to start a family, it is good for that also. We have many parents who save a ton of money taking their kids out of private schools in the San Fernando Valley and Los Angeles when they place them into a scholastically competitive public school in the Santa Clarita Valley.
Considerations before buying a home
First and foremost - what type of loan are you obtaining and where are you getting it from?
If you are able to track back to when the last foreclosure cycle started and what happened to spark the eventual, look to the 2nd largest subprime lender who claimed bankruptcy in March/April 2007.
Sub Prime - Not as good as "prime". These are borrowers who get lent money to buy homes, but buyers that are unable to obtain "prime loans".
The first bank to fail at the start of the last foreclosure housing market was a Sub Prime Lender.
Look at your loan, look at the interest rate, are you paying too much? If you are not a risk and have good credit, you should be able to obtain the typical market interest rate. If you have bad credit and if you are more of a risk you will be dealing with a subprime lender. If you are in the first category and are having to pay a high-interest rate, ask why. Then call me and tell me why. I will property vet what you have been told. And if I don't know the answer I have the best Santa Clarita lenders that are in the business of lending money.
Know this, in some cases, some take advantage of others when it comes to borrowing money. It's not fair and I'm just glad we have a detection system with an appropriate method.
Can you afford your mortgage payment? The housing market aside, if you want to buy a home and if the being able to write off your mortgage interest helps you on your taxes and if you are tired of renting, you'll be proceeding. I have my clients, after stopping with me to discuss their needs first, second, go to one of the lenders that I know who is the best in the real estate loan business.
If you have a 30 year fixed mortgage, that is the safest. Back in the last real estate cycle, there were a lot of "funky" loans being offered with interest rates which were a lot lower than the typical rates which the savviest of homebuyers were paying.
The attraction was the more affordable payment. The borrower knew what was eventually going to happen, after a certain time the interest rate was going to increase. This type of loan is known as an adjustable-rate mortgage (ARM). It's not something that I like and in an unstable housing market, it should not even be offered. I like the 30 year fixed loan.
The other thing that got the past market into trouble was the 100% financing, people were able to buy homes with zero skin(downpayment) in the game and with an adjustable-rate mortgage.
This is facts - If you are able to afford your home payment without future pay increases and raises, if you are able to make your home payment without having to depend on overtime, if your home loan is a fixed type of loan and if you can afford the "other costs" of homeownership with keeping the same dependency rules, then you can survive any and all foreclosure markets.
If a real estate bubble bursts, you won't lose your home if you are able to afford your payment. If real estate resets to 1/2 of the current value, you can stay put and you are able to live.
The question of "whether you'd want to" will come to mind sooner or later. The one thing that I know for certain is it's nice to have the choice and not be forced out of the place you had been calling home for a while.
I'm Connor with HONOR and I love helping our clients with all housing markets including the Santa Clarita housing market 2019.
When you are ready call me, email or text me. I'll be here to get your trusted advisor with real estate. Be safe and I will talk with you when you are ready.
I have the longest-running Santa Clarita real estate radio show, have a listen and contact me as soon as you are ready, before any other sub-entity in the real estate field.