The problem was we have been recovering since the beginning of 2012. In fact, recovering so well the Santa Clarita real estate market is close to being 10% off of the peak prices we experienced back in 2006.
There are a few factors which are contributing to this market being difficult.
- Lacking inventory
- High competitiveness among home buyers
- Sellers and Buyers being emotional
- Current interest rates vs. past interest rates
- Sellers future living arrangements
We have been in a seller’s market in the Santa Clarita Valley for the past three years. The fewer in number that real estate listings are, with the right buyer drive, the more competitive the market is.
This has been the case since we bottomed out in the Santa Clarita housing market – late 2011 and early 2012.
The homeowners, those who have been wanting to sell since 2016 are having a hard time moving.
It’s not that they don’t love their homes. They are being pressed up against the glass due to them having less room than before. This could have been caused by home human units being added. These homeowners could also have three or more generations in their home – BTW – we are called the sandwich generation. These types of homeowners could have an excess of “stuff” and that is causing a severe amount of discomfort.
However, for most home sellers, while these are big issues, it is not enough to give up their current interest rate.
If you were a homeowner in December of 2012, you may have been able to score a 3.35% interest rate on a 30 year fixed mortgage with only having to pay .7% in fees – according to Freddie Mac.
If you refinanced in July or August 2016, you could have gotten a 3.44% interest rate with paying only .5% in fees to the mortgage lender, according to Freddie Mac.
Those folks are having a hard time giving up those rates to obtain the current APR – 4.75% (05/05/2018)
Of course, how much more their home is worth today than when they purchased it, could make up for those interest rates by allowing them to “buy down” the interest rate.
That is going to depend on the cleverness of their home loan professional. We had our number one Santa Clarita real estate lender allow one of our real estate clients to buy down their interest rate to the mid 3’s and there was no sticker shock!
We are in a seller’s market and the Santa Clarita real estate inventory has built to 100 units for sale more than just 4 weeks ago. I had been waiting for our typical spring and summer additions to standing real estate inventory.
The standing inventory is running, getting caught and bought. Having a home with more than 30 days on market is very untypical unless it’s in a seasonal community or age protected one.
When the home buyers are competing with each other in homes which are for sale, knowledge, and experience of your Santa Clarita real estate agent is paramount.
The final thing I want to speak about has to do with the home seller so the buyer may understand more about that dynamic.
Most home sellers, I’d say 90% want to buy a replacement property. Maybe they are selling to upsize. It could be they want to downsize. Maybe the Santa Clarita home seller wants to leave California. Whatever the reason, they have to consider their future home. Will it be on the market waiting for them when they accept your offer? Of course, if they wanted to sell their home, and have the home buyer give them time to find another and close that home at the same time, they could.
That HOC – Home of Choice contingency would depend on whether all parties agreed. That is something, also, that most home buyers in this market agree to due to the lacking inventory in the Santa Clarita Valley.
Please make yourself and those who are with you for your real estate endeavor use an experienced and knowledgeable realtor. That is number one. Make sure they are taking the time, as we do, to give you their version of a Crash Course on Real Estate. Either at their office, over the phone or at some other location.
I’m Connor MacIvor and I want to be your Real Estate agent in the Santa Clarita – Valencia areas within Southern California.