There are a few factors on the horizon that may increase the local re-sale inventory.
- Lumber Prices and New Home Construction.
- Forbearance ending June 30, 2021.
- Rising interest rates on mortgages.
How is that for three tasty snippets?
Let me unpack this below - first I'll speak of the current real estate inventory in the Santa Clarita Valley cities.
As of 5/4/2021, we have 190 total residences in some form of active status.
- Canyon Country
- Stevenson ranch
Housing types included in the most current Santa Clarita inventory are:
- Single Family Homes
- Up to Four Unit housing
Coming soon is a modification to the multiple listing service rules that were implemented last May 2020. I'd venture to say it was changed to being something the agents could use due to the fact they were competing with Zillow and their "coming soon" or pocket listings portal. Well, lol - as in technology - that did nothing to change much.
Zillow still has the coming soon listings as they are posted in the MLS, the MLS owned and operated by the local Board of Realtors in the Santa Clarita Valley. And Me, little old me? I cannot display them on our Santa Clarita home experts website.
The only way I can have a client see the coming soon listings is to set them up on a search. It's easy, painless, and only takes a few minutes, I know - maybe I'm missing the point. Or on 2nd thought - I'm sure I'm not.
Let me get off of my soapbox and back to the listings and those numbers you have all been waiting for pertaining to the Santa Clarita Valley cities.
- Total listings - active statuses - including coming soon and showing active are 190 in all of the Santa Clarita Valley cities.
- Coming soon listings are sitting at 43 out of the 190.
- Real Estate listings that are in escrow - 184
- Real Estate estate listings that have been removed from displaying as "active under contract", which are still in escrow "pending" are 340.
- During the past 7 days, 108 residences in Santa Clarita have sold - recorded in a new owner's name.
- 8 residences did not sell and went the way of being "expired" listings. (this is a tough one to swallow at this time when the real estate market is at an all-time high and when inventory has been so epically low.
Further research into the 8 homes that did not sell tells a story.
The maximum number of days on market time frames was 45 days. I have no idea how long the contractual date was. I take 180-day listings as my minimum. The rest of those listings showed a strange variation of days on market time:
- 4 - Susan Beth - condo
- 6 - Bouquet Canyon Rd - Single-family home
- 2 - Babington Street - Single-family home
- 13 - Heartwood Court - Single-family home
- 45 - Barrington Way - Townhouse
- 37 - Macmillan Ranch Road - Single Family Home
- 15 - Player Drive - Townhouse
- 13 - View Pointe Lane - Single-family home
I added the street names and housing types to paint a more clear picture. Three of these listings offered a less than market commission. I know that would not have been a reason due to how hungry real estate agents are these days with the lack of inventory - they take what they can get. (which should always be the standard when it comes to dealing with people wanting to buy real estate - no steering ever!)
Why did these properties in Santa Clarita Valley fail to sell? That's easy - Price.
There are three reasons why a home does not sell and it always comes down to these:
At the end of the day, it's easy to blame the market, but this market is high and hot. Blame the reputation of the agent, but in a Hot market, I'm positive who you hired would not stop other agents from showing it to their home buyers. Maybe it was a "change of mind" thing on the seller's behalf. With the short time frames as it pertains to these properties being on the market, that would be my first honest choice.
Most of these listings entered escrow, albeit for a very short time. In some cases, the commission for the agent representing the buyer was dropped as well.
There is a lot to comment on here - pertaining to the properties entering escrow, maybe the sellers thought they were victim to a fast-talking type of salesperson who sold them a bad bill of goods. Whereas they priced their home for less than they should have, causing massive showings and multiple offers. The sellers at that time got angry and told their agent to cancel the deal before they accepted an offer.
Some sellers are not informed from the beginning by agents in a hurry. When I meet with sellers, as is the same with the other top agents in Santa Clarita, I take my time. I make sure to build in extra time for questions. Being misinformed is a bad way to start a business relationship. To me "misinformed" is the same as "not informed". All points need to be hit upon and the client needs to be adjusted to the current market dynamic.
Having a seller not being able to be home for an entire weekend during the COVID19 lockdown because their home is being shown every 15 minutes to home buyers, is something those sellers needed to have explained beforehand.
Getting over 20 offers for their home in the time frame of 2 days is another thing they need to be prepared for.
It equates to being sensory overload and the concerns and questions will come if not covered beforehand.
Some agents are quick talkers. Not my cup of tea.
Some agents are refined, smooth and you can tell they know their stuff - More my style. I do like to buy things. And I love dealing with a professional salesperson. Not those who use tricks or devices to sell you something, but those who have a craft and believe in you and their service/product.
More Santa Clarita inventory coming?
With lumber prices up over 200%, new housing may be rising in cost at a pace to outrun the local resale prices.
That may move paused home sellers into a more active role in moving more toward getting their homes pre marketed and placed onto the market for sale.
In addition, there are several large projects in the new housing realm that have been approved and where they are now open for taking loan applications with their preferred mortgage lender.
While that is not exciting news - this could impact the re-sale market and break loose some inventory soon!
If you remember shortly after the COVID pandemic was in full swing and businesses had shut down, the act of forbearance was initiated with the big mortgage lenders.
That ship has run its course and the MBA estimates 2.8 million homeowners are in forbearance.
This will be ending on June 30, 2021.
What then? July 1st - or at the mortgage payment due date, the next payment mortgage payment is due.
The numbers of people who will be able to meet that July 1, 2021 payment is different depending on the inquiry and source online.
However, most are talking about a re-adjustment of sorts related to housing prices.
I'm not sure if even the overall forbearance number is enough to teeter this market due to the number of homes that have negative equity - which is very close to zero in the state of California.
Now, as of May 4, 2021, the Santa Clarita Valley included, has most of the homes holding mortgages in a positive equity position. For all purposes, these homes could sell where the sellers could walk away at least being even, in most circumstances they could talk away with money in the pocket. (check with your tax professional)
Housing prices have risen to such a point because of home buyers and the bold moves to inject cash above what the appraised value would be on their home purchase.
This did not happen overnight, but it did happen by buyers who became tired of losing out on offer after offer.
Finally, they did something that I'm still not comfortable with, they chose to waive the appraisal contingency, and pay the difference between the appraised value and what they offered in cash.
Today, that waiving of the appraisal contingency is commonplace. I'm still not comfortable with it, but as one of my buyers told me, "Connor, I respect your position and that you are looking out for my best interest, but I need to buy this home and I will do whatever it takes to do so..."
At $60,000.00 over list price, my buyers beat out the other 27 offers and had a home.
I will tell you, while some would like this market to continue forever, it will not. It's unsustainable.
The tipping point factor is the question.
What will tip this market and cause a readjustment of home prices?
Moving into the interest rate question. This one is a favorite of some of the more predatory in the real estate/lending game.
Hurry before interest rates get out of control. We have been very low with regard to interest rates for the past few years now.
Although we probably won't see rates in the 2's again - they are just breaking into the 3's and that may cause the next real estate listing rush in the Santa Clarita Valley.
Most of those people who own real estate, which was contemplating selling before COVID, refinanced. They are at very low-interest rates. In fact, some of those people refinanced multiple times - every .3% to be exact.
Now with the rising interest rates, they are asking themselves the question - what happened to me wanting to sell and move up, down, or away?
They look at the market, they could sell for a hefty return and do what they want, if what they want does not include buying a home now. Why? Because inventory is slim to none in the same market.
If they want to exit California, they may find better inventory numbers, but that will depend on where they are going. They could find themselves surrounded by other Southern California relocatees who are wanting to do the same. Ask the locals what that means when So. Cal people take their big California home equity returns to other states to buy locally?
It means prices are soaring in those markets, to a point where "the locals" cannot afford to buy anything the prices they had hoped to buy. New housing is being outrun, they cannot build homes fast enough, same in the Santa Clarita Valley, and the re-sale market is tied up with all being in escrow.
This is happening so much to the point where I get others that have migrated years ago and the locals almost want to throw rocks at any cars from California.
The world has indeed changed.
I'm Connor - there are many reasons for a re-adjustment in the local market within the real estate world. I would say throw caution to the wind and don't be swayed too easily.
I will keep you on top of the real estate-related news. If the local Santa Clarita real estate inventory changes in any way I'm on top of it. The same applies to the interest rates, new housing, and forbearance.
I'm on top of all of them because it's my job. and I love my Job!!
Be well - thanks for taking the time to read and let me know when you are ready for me to help you with your Santa Clarita real estate.