5 Reasons the real estate market won’t tank

The state of the market was presented on our Travel Tuesdays Broadcast. The Santa Clarita Valley is experiencing growth which is similar for the rest of the United States.

Real Estate questions come about reference to whether or not to buy real estate at the present time. If you own a home, and if you are moving up or down within the same area or city, in most cases, it’s a wash.

If you are a property owner buying new housing, and there are advantages with those new homes compared with other new homes being offered by other home builders, such as new homes with no Mello Roos, you are going to have an advantage. (more about this on our Housing Radio Show Episode 2017-010 and below)

I talked about the latest location of where you’d be able to find all of the Santa Clarita real estate blog articles. Those I started writing in the early 2000’s, before blogging was a thing and when it was still associated with family journaling.  Santa Clarita real estate blogs – I have written over 10,000. – SCVblog.com

SCVblog.com is simply an easy to remember location a vanity URL, where you can find the latest in Santa Clarita real estate within the articles and blog posts I write. BTW, I’m Connor T. MacIvor, Realtor – REMAX of Santa Clarita and REMAX of Valencia

The rising interest rates and the market

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Read all of our Santa Clarita real estate blog articles

While the rising interest rates slowed the re-sale housing market, I don’t believe it’s going to have a huge impact on real estate sales in the future.

I’m opining, with my basis for my belief, considering a few fronts. Economy, Employment, Stock Market, Lending Guidelines and the real estate inventory.

We had a client told recently, if they want to be underwater in the next year, to buy now.

I don’t agree because of the state of the economy today. Maybe this financial advisor has an awesome Crystal Ball, however if that was the case he would not be working for a living, IMHO.

Let me get to my points:

  • Economy – it’s getting stronger for the time being. GDP – Gross Domestic Product growth for the third quarter of 2016 was 3.2% which was the fastest in the last two years.
  • Employment – We are down to 4.6% from 4.9% in December, and the consensus is it will continue to get lower with the seen and “rumored” new job creation and jobs returning from other countries.
  • Stock Market – The Dow Jones has been at all time highs lately after the announcement of a new commander and chief winning the 2016 election. (whether you love him or hate him – this is fact)
  • Lending Guidelines – During fall of the real estate cycle back in ending in 2006 and the beginning of 2007, we observed the lending guidelines were very lax. Anyone with a heartbeat could have gotten a loan without having to crawl through any steep hoops. Since that time, Lending Guidelines have become a 2 ton vice of sorts. They can no longer be considered lax and are under Government Scrutiny. This makes the current real estate market different from the last one where the bubble burst.
  • Real Estate Inventory – Most of the country, as in the case in Santa Clarita CA, has issues with not having a lot of real estate inventory. That is why the new home builders are having a hayday and new construction at high production and ramping up more. When real estate inventory is tight, and when we have high buyer demand, the housing market is in a “seller’s real estate market”. This gives the advantage to the home sellers.

As long as we remain on this course, we will have modest real estate increases, with some minor reductions, and mostly flatness in the real estate market.

If we start getting more units of real estate inventory where the buyers slow down due to rising interest rates, we will see the flatness in the Santa Clarita real estate and housing market manifest itself.

No one knows where this economy is headed, I’m saying if the real estate market relaxes it will not for the same reasons as back in 2006/2007. A lot of those errors have been corrected within the Real Estate Loans and Mortgage Lending world.

I have been representing buyers and sellers since 1998. I do not see the housing market collapsing like it did when loans were being written hand over fist to some who should have not been allowed, due to loose lending guidelines, to borrow money to buy real estate.

While there are a lot of dynamics related to real estate and why the last market occurred. Those reasons don’t hold true in today’s real estate market. We will have to keep our eyes peeled on the current housing market as to any changes, modifications or news to ensure we give the best advice to our real estate clients in the Santa Clarita Valley cities.

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Connor MacIvor

Top REMAX Realtors in the Santa Clarita - Valencia and Greater Los Angeles areas. Local Real estate agents specializing in buyer and seller consultation and representation.

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