When Paris and I meet with our clients, for the first time, we talk about affordability with regard to Santa Clarita real estate. However, you may be surprised to learn that we are not talking about the real estate itself. We are talking about afford versus qualify.
The amount a person may qualify for may be above their “personal and intimate” needs. Case and point. We have a couple that we have been working with for the past 6 months. They are “qualified” for $400,000.00. However, they only can “afford” $350,000.00. Stu(the husband) Explains, “I know that we could Squeeze by if we bought a four hundred thousand dollar home.. But I don’t want to be mortgage poor…”
Do yourself a favor – make sure your real estate agent is on the same page. This is very important when you start viewing homes for sale. If they are taking you into residences that are above your “personal comfort price amount”, you are asking for “long term trouble”. It’s super hard to forget what your “strapped” amount can buy. Stay low – at your comfort zone or lower. If your realtor makes that “price leap” on their own – dump them!
It appears that affordability is driving real estate. In fact, in many areas affordability levels are driving prices and volume up adding to a recurring theme of optimism. Data released this week showed an increase in real estate sales volume, an increase that was above expected. Last week data announced that new construction of homes was up. In between positive headlines touting an increase in volume data were headlines about rates lowering, affordability levels being exceptional, and a bottom being in sight.
Could it be that optimism is pervading and pessimistic doom and gloom attitudes are taking a back seat? It is a bit premature to get too carried away but recent news is indeed positive. CNN Money just published an article titled “Where Home Prices Are Rising Fastest” and the article points out some real estate markets that are showing signs of a rebound, where values are actually expected to rise in the coming year.
Real Estate is taking a slow path recovery and will continue a slow path due to the fact that lenders are not chomping at the bit the way they were during the housing boom. The reality is, however, that demand is up and exceptional affordability levels have buyers finally entering the market, and this is a positive sign.
IF you want to find out how much home prices are in the Santa Clarita Valley – click here for our Home Prices Pages for SCV!