By now, most buyers have heard the news about the .25% interest rate hike by the FED. Some of our buyers were a bit stressed when our lenders mentioned it. The impact is about 25k in finance-ability. If our buyers who were buying in the half a million dollar range have the interest rates increase .25% – that is going to cut into their ability to purchase at 25,000 dollars.
If they were buying a home for $500,000, and the interest rates increased .25% – they would now only qualify for $475,000.
Of course, this would have a much larger impact if there were a recognized surplus of homes on the market for sale. This is not the case in Santa Clarita real estate.
As of this morning, April 2, 2018 – Here are the totals for Santa Clarita homes, condos, and townhomes for sale:
Stevenson Ranch 27
Canyon Country 105
Agua Dulce 58
These are reflective of homes and real estate listings which are in the Active Status. I have also included the real estate listings that are in the process, of escrow. These homes have about a 1/3 chance of falling out of escrow.
According to the latest stats, I was able to gather when working within the Santa Clarita Valley Cities. A third of the homes which entered escrow had those escrows canceled.
The reasons why are a bit more complicated. There are several that can be mentioned without getting into a lot of detail.
Buyer’s Financial picture changed – It may be that a home buyer was buying a home with a cosigner. That cosigner decided not to move forward and the buyer is unable, financially, to go it alone.
The seller has become an immovable object – The buyer may have asked for something of a health and safety issue to be repaired or to have a credit for. The seller may have refused that and turned the stomach of the home buyer.
Issues of Insurmountability – Sometimes something is discovered that a home buyer cannot fathom. Something so damaging the buyer cannot and will not move forward. Here are a few:
Finding out the X with an active restraining order lives next door (we have had this happen).
Finding out the seller is a registered sex offender (this has happened to us too)
Discovering that a political official on the other side of the “system” lives across the street.
There are so many reasons. I will tell you that most real estate home buyers are very flexible. Especially when they are working with a real estate agent who is giving it to them straight and not bending the truth about any part of the home buying process.
I will tell you that the Santa Clarita Valley has weathered the latest interest rate increase by the FED. I’m going to state that is going to have a very little long-term impact on our housing market in the Santa Clarita Valley. We will see the market continue and inventory to remain light. The major reason why real estate inventory is not increasing is we are still a bit early in the year yet. The other reason is sellers are unable to bridge the gap between where they currently have their interest rate and where it will be when buying the replacement home.
I’m Connor MacIvor and I’m glad to be at your service within the Santa Clarita Valley. My entire team is back in Santa Clarita ready to be at your service. I’ll be there for you no matter where I’m at in the world. We will be back within the month and are always here to serve you no matter what we are up to.