Lacking to say the least. Causing distress amongst real estate buyers in the Santa Clarita Valley.
I did a recent radio show and the number has not moved. It’s not that new real estate inventory has not come onto the market being for sale. There have been new listings posted for sale on SCVnest.com which is your connected MLS resource.
However, the “absorption rate” is causing the SCV housing market to be even from last week to this week.
Absorption Rate – This is the rate at which homes are selling. When we have a neutral absorption rate in Santa Clarita Valley real estate – that means homes are selling as fast as they are coming onto the housing market being for sale.
Positive Absorption Rate – This is the case in real estate where there are new listings which are causing home inventory to build. Example, in Santa Clarita Valley, we have 465 units for sale today. If next week we have 475 and the week after 485 – this is a positive absorption rate, at least from a home buyer’s point of view. It would be a negative absorption rate for a home seller, which causes them to have more competition.
Negative Absorption Rate – This is also buyer/seller dependent. If we are in a seller’s market the absorption rate from a seller’s point of view will be positive. And if we are in a Buyer’s market, the absorption rate will be positive as well. Both will be negative depending on who the absorption rate is favoring.
The market research for Santa Clarita Valley is important because it shows where the current real estate market is and who has the advantage.
There are several items which need to also be addressed. The interest rate and buyer/seller drive.
If financing is hard to get and if money is hard to be lent, that could create a market dynamic which will stall home sales, even if we are in a seller’s positive absorption rate market.
The same applies to interest rates. While currently we are around 4.2-4.4% interest rate for home mortgages, that number is higher that it has been for the past few years, creating a shock factor amongst home buyers and even potential home sellers.
If a homebuyer has been wanting to buy a home for the past several months, they would have been approved for a mortgage loan in the 3’s – referencing interest rate. The leap from 3-4 is difficult and if that buyer was qualified for 500k – they just had that number reduced to $450k with every .5% increase/change in interest rate.
The Santa Clarita home sellers are also having a hard time bridging the gap to sell. Most home sellers are currently in the 3’s regarding their interest rate on the home they may be considering selling.
To make the leap into the 4’s regarding interest rate, that is a tough move for most home sellers.
However, on both accounts, the home sellers will reach critical mass and sell – the home buyers will refactor their reasons for buying real estate and move forward.
I’m Connor with Honor and I’m glad to be of service to you and yours. Please reach out to me when you are ready to move and I’ll be there for you and yours. Remember, I do a housingradio.com show multiple times per week pertaining to Santa Clarita Real Estate.
I have also penned (typed) – penned sounds much more romantic – over 10,000 articles related to housing and real estate. Showing what advantages sellers of Santa Clarita homes have – plus giving the Santa Clarita home buyers an education.