Let me get into why that may not be true.
By fall, I’m not meaning the “bubble bursting” as we observed back in 2006/2007. In fact, we are not in a real estate bubble. There are two major factors driving the current Santa Clarita real estate market.
- Lacking inventory
- Raising interest rates
Supply and Demand remembrance from high school will give you the intel on the inventory crisis we are seeing and have been dealing with for the past few years in Santa Clarita real estate.
The Santa Clarita Valley housing inventory has fluctuated between .5(1/2 a month) and 3 months pertaining to the absorption rate in the SCV.
Absorption rate – the time it would take for all the Santa Clarita real estate listings to be sold and to get to zero units for sale if no other inventory were added to the for-sale market.
A healthy real estate market in Santa Clarita CA is an absorption rate of 6 months. We have not seen a market like that for years.
If a Thousand additional Units for sale were to enter the resale market in 24 hours, that would turn the market right around and create a Santa Clarita buyers market.
Remember to take into account the numbers of homes that are selling as compared with the number of homes added to the current Santa Clarita real estate inventory.
I pulled the real estate data going back a year in Santa Clarita real estate so you can gauge the numbers of homes that were sold per month with the standing active inventory in the SCV cities.
Today the holdback is on the potential home seller’s side. The ball is in their court. We speak with potential home sellers often and they are concerned their new interest rate is going to be so much higher than their current one, that it is not worth the move.
Selling a Santa Clarita home is a personal decision. One of the items that we discuss is the mortgage interest deduction and we have those homeowners speak with their tax professional to find out if that is going to make a difference between them living uncomfortably versus selling to be comfortable.
As I ask, “What prompted your inquiry into real estate?” Most will respond that they are outgrowing or downsizing. They need more space or have too much. This is the beginning of our game plan with Santa Clarita real estate where I help guide throughout the real estate processes.
I don’t see the real estate market reducing in value. Look at the New Home Builders, they are only ramping up development and building new homes hand over fist.
There are enough current home buyers in the Santa Clarita Valley cities to continue to keep the pressure on each other by making multiple offers on the standing inventory, not to mention the new listings that hit the home market for sale.
That drives the home prices higher than listing prices and creates the current market we are seeing in the Santa Clarita real estate venue.
As can be seen on this graphic covering the past year is an average price increase across the board in the Santa Clarita Valley cities of about 25k. This is balanced between condos, townhomes, and single family residences in the cities of Castaic, Canyon Country, Newhall, Saugus, Stevenson Ranch and in Valencia CA.
We safe – reach out to me, Connor MacIvor, when you are ready for my consultation with your Santa Clarita – Valencia CA real estate needs and I will be here for you as I have been for so many others who needed me re: Santa Clarita real estate.