Doing the research has been a Blessing to our real estate clients and I bring it to you via our Santa Clarita real estate news outlet and radio show/podcast/blog.
During the last 24 hours, we broke 17000 real estate listings in Southern California where our local Board of Realtors reaches.
This was eventful and totally reflects the distressed and foreclosure listings which are on the market for sale currently. Which those listings have returned to 1% of the total market listings. When you have a total market that is 1% foreclosures and distressed real estate the market exhibits health.
Southern California Bank Owned Foreclosures
[listings title="Foreclosures - Bank Owned and Distressed homes for sale" qs="feature=BO&sort=importdate&status=A" propcount="12"]
Homes and real estate that are distressed in nature within Southern California has returned to "healthy" market levels of about 1%, making up the total real estate listings. Currently, we are sitting at 150 residential real estate listings out of approximately 17000 that are distressed in nature. These are composed of Real Estate Owned - REO homes, Bank Owned real estate, all of which are Foreclosures. Also, short sales and short pays are also in the mix. Those are homes where the homeowners cannot afford or will not make any further payments on the real estate who was financed by another.
Some, I should rephrase that and say "Most" consider the bank owned real estate and other distressed types of homes to be better deals than other regular, run of the mill, garden variety re-sale homes.
That statement, whether true, depends on the status of the current housing market. I will show you that in a market where the homes are increasing in price month over month, the entity that owns the foreclosure or distressed property is probably going to price the foreclosure/distressed home at a 90 day in the future estimate of value. This was the regular procedure when we were representing Citi bank in the sales of their foreclosures and real estate owned properties.
Some think that foreclosures and bank owned real estate are stellar deals. They do because everyone says that they are.
On the flip side of the coin, if we are in a distressed market and if the homes are reducing in price month over month, and if that foreclosure if being priced, it will be so by the ownership entity at a three month in the future estimate of value. This is the "great deal" that you have heard about. And if that property is not selling as planned for the price that was determined, then at the 30-day market there will be another valuation completed and that property will be reduced in price.
If that trend continues, then at the 90-day point, the listing agent that the bank originally hired to represent them in the sale of that foreclosure will be fired and another agent will be hired to represent the bank. Like I love to hear them say, "It's only business."
The best timing would be to have that crystal ball, to see the market coming to an end of having the homes reduce in price and then timing it one to three months ahead, spending everything you could and buying as many foreclosures/distressed properties as you are able. When the market turns, then watching as those foreclosure build equity and holding off and making a cool 50%, if the market will sustain such a feat.
This is reflective of the Santa Clarita housing and real estate market. After the fall of the last real estate cycle, ending 2006 beginning in 2007, we observed a few months that everyone was standing around scratching their heads. I started to hit up the banks, seeing the looming foreclosure and bank owned real estate market. I had also never ever heard of a short sale or short pay property. You can bet that I learned quickly because my business would start depending on that field of expertise.
The Santa Clarita real estate market bottomed out at the end of 2011 and the beginning of 2012, at least in the Santa Clarita Valley. That is the time the market turned and started to have the real estate inventory depleted and prices started to go up and up... They have continued that trend until August 2018. This is the time where we had inventory in large numbers added to the real estate and housing market. It's not a case of the new home builders becoming more competitive or building too many homes. It's the case of the local real estate market increasing 30% more homes and real estate for sale.
Overnight in real estate within the Santa Clarita Valley can be spoken about in a period of a single month. Something happening that quickly would be referred to as happening "overnight". We had one such period of time from mid-July 2018 to mid-August 2018. It was at that time when we have a substantial increase in real estate inventory.
Single Family Homes, Condos and Town-homes started to enter the market as being for sale. In some cases the home sellers were not on the market for sale, they were only contemplating placing their homes on the market for sale. Then something happened that I like to call contagious fire. They observed their neighbors attempting to sell in order to move up, downsize, or move to a different city, area or state.
So, they put their home on the market for sale. I observed a "higher" than average add within a community of townhomes within the Summit in Valencia. That was actually during a period of about 4 days, where one home was for sale, then within the next 4 days, there were 6 additional listings placed on the market for sale. Talk about seller stress, that event would have driven most sellers into taking drastic measures.
Some did and down came their listing prices. Instead of holding steady where most of those units would have sold for the asking prices, they dropped their prices to a point where some of those home sellers were unable to compete. Some just could not go that low. Those home came off of the market and are in a holding pattern until next year, potentially.
The future of Santa Clarita real estate
The remainder of this year the FED is meeting two more times. September 28 and 29th. And again December 16/17th. The FED is the federal reserve bank. That is what you will want to watch to see if interest rates on mortgages are going to be increased or stay the same. It's not always the case that when the FED meets that they raise interest rates. In fact, it was rumored that it was going to happen in 2017, and it did not when "they" said it would. The July 2018 meeting of the FED had interest rates not move.
I can opine that they are going to or not going to raise the interest rates the subsequent meeting throughout 2018. However, that opinion does not usually serve but on master and that is my own pocketbook.
Watch out for those that give opinions that measure out to be self-serving. Those types of opinion drive me crazy and due to my time in real estate, since 1998, I have been able to identify them pretty well.
It's just a guess. Some people are able to make better guesses than others, but it's still just a guess. If you are going to move forward to real estate, know the facts and explore the worst and best case scenarios pertaining to what you want your next real estate action to be.
Online searches and Santa Clarita real estate information
I earn a living by representing home buyers and home sellers. If you are a home buyer my services to you are free. That is because the home sellers, no matter if they are my "contractual" home seller or not, pays my commission. They pay me and the agent they hired.
If you are a home seller in the Santa Clarita Valley, and if you hire me, you will be paying me what we negotiated together as far as my commission and the other agent who is bringing the home buyer the negotiating table.
Something about online deceit. If you have a real estate agent knock on your door and if they tell you that they have a buyer for your home, ask, "How do you know your buyer would like my home, you have never seen my home, nor have they?"
Then, as soon as they stand back up say, "Prove it".
That is if you are contemplating selling your place. Consider that the agent had "real buyers" that wanted to make an offer. What would happen if you "officially" had your home placed onto the Santa Clarita real estate market for sale? What if you have your home advertised and marketed correctly to appear on over 200 real estate syndication and brokerage websites, within the Multiple Listing Service and in front of every top producing (and not producing) real estate agent within a 200-mile radius (Crisnet - Southern California MLS)?
The truth be told, you may actually have more offers on your home. You may have multiple offers enter the picture. If you are working with top Santa Clarita real estate negotiator as the agent you had selected, then you may get more for your home than you had expected. Then what you had expected on your best day :)
I have seen this happen when those staged real estate tricks are not accepted as being gospel. When the consumer educates themselves to understand what may be happening and how to take the best advantage of the situation.
Watching the inner working of the real estate machine, especially in California where there are 41 regular disclosures that accompany every single real estate transaction, there is way too much that can be lost without hiring a professional realtor to serve your real estate needs.
Progressing into 2019 within Santa Clarita real estate
Potentially this is how the end of 2018 will play out (I'll get to 2019 in about 200 words). 2018 will still continue to have Santa Clarita real estate inventory added to the units for sale. There are going to be buyers in the current market and throughout the rest of the year that want to buy, they will find what they are looking for in the extra housing inventory and make those residences a home.
The home sellers and the home buyers that are in the market during the holidays in the Santa Clarita Valley are serious. They need to buy and they need to sell. There is no other fathomable reason as to why anyone would want their lives turned upside down during the holidays unless they are attempting to avoid something that they see looming over the horizon.
I tell my home sellers if they need to sell and have been listed for a while, maybe the best strategy is to take their home off of the market mid-November to allow for the CDOM market reset. The CDOM is Cumulative Days on Market. If the real estate listing has a period of time of 90 days without being listed for sale before it's relisted, then said listing will show as a brand new real estate listings on the Multiple Listing Service.
This strategy works well when there is a breaking loose of the real estate market which may or may not happen. Placed in conjunction with the best time of any year to sell, at least traditionally. In the Santa Clarita Valley, while we don't know what is going to happen next March of 2019, I will tell you that it's in line to be a very active real estate season starting about Mid March 2019.
We will have an increase, as we typically do during the spring/summer months in Santa Clarita real estate. We will also see that we are going to increase in housing inventory starting to see that build the end of March of 2019.
There will be nothing surprising about the lending world. Home loans are still going to require a down payment keeping the "equity having" status of our current housing market stable.
If there are any 100% loan programs that startup, which I have heard a rumor, they will be treated like the plague until the point where we forget the last fall of the housing market.
ARM - Adjustable Rate Mortgages, these too, as we observed in the last real estate market, will be avoided by those who are going to maintain the home they are buying for longer than a few years. If you are going to go for an ARM type mortgage - please read all the small print and make sure you know what you are getting. Is there a balloon note at the end of the term? What happens after X number of years, does the interest rate increase depending on what index? What if you want to sell your home or refinance, is there any penalty associated with having this particular type of loan? If you ask, then you will know. The issue is that most people don't know what questions they should be asking. When you hire a real estate professional, they will give you those questions and explain to you why they are important.
VA loans and lending will remain great deals for the Military Veterans of the world. We have a large influx of Veterans that are using their Veterans Administration home loan benefit here in the Santa Clarita Valley cities. We also have active duty military who are using their VA loan benefit here as well, not just the reserves and honorably discharged members.
I have been representing home buyers and home sellers in the Santa Clarita Valley since 1998. We live here, we have raised (still raising) two boys. My inlaws live here, my father in law is deceased, mom is with us and we are all about our community and love living in the Santa Clarita Valley.
I'm Connor T. MacIvor and I'm glad to be at your real estate service when you are ready, just contact me and I'll take great care of you. Enjoy the Santa Clarita real estate video that I posted at the beginning of this Santa Clarita real estate news article.