I love the LA Times. I really do. I’ve been reading it since the 1970’s, pretty much accepting anything written because somewhere I learned that you cant print it if it isn’t true. About 15 years ago I started a quarterly update to my past clients and friends letting them know what was happening in Real estate, and people seemed to appreciate that it was written by me, for them. meaning it was about what was specifically happening in Santa Clarita and how we might be the same-or different, from other markets. After a year or two though I noticed that what I read in the Times, and other publications too, was often either 2-3 months behind the market, or didn’t apply here at all! Most people reading this want to know what is happening to their home or neighborhood. How much would it sell for? How long would it take? Well, if you read the lead story of today’s paper it would tell you that prices are up and sales are down. This is certainly true. Sales this year are well behind last year. A lot of the volume a year ago was driven by investors snapping up the last of the distress properties. I reported in January that this buyer is largely gone. Prices are up too, no arguing that many of todays would be buyers cant find a home in their price range, specifically in the lower price points where there are lots of buyers for the few homes available. Then the article attempts to explain where the market is hot-the upper price points, and where it is not-the lower price points. Using Redlands ($300,000 homes that are sitting) and Manhattan Beach as examples (Million dollar homes getting multiple offers often for cash), the article suggests that high end sellers are in fat city and smaller home sellers are stuck with buyers that cant qualify. And in Santa Clarita nothing could be further from the truth.
I am happy to report that, so far, we are off to a strong spring. In January I suggested that the best way to know if we would have a strong Spring selling season would be to see if new homes coming on the market were selling quickly, or if inventory would build, making it more of a buyers market. Well inventory has NOT gone up. Today we have almost exactly the same amount of homes for sale as in January-530. What we have a lot more of, and we should, is homes under contract. Meaning, the homes that have come on the market have for the most part been absorbed. Does that mean prices are rising? Yes, but not where the LA Times would have you believe. Specifically it is still the under $500,000 market that is red hot. I can give dozens of examples, but two homes illustrate this best. Two years ago I helped the daughter of a great past client purchase her first home in the low $200,000’s. Under 1000 square feet, this 2 bedroom, small yard home had gone up a lot in 2 years, and she was ready for bigger. Priced at $325,000 we had over 20 showings in 9 days and several offers. it sold for $338,000 cash. Thank goodness because there are no comps to support an appraisal for $338,000. Last week I put a 3 bedroom home in Canyon Country on the market for $400,000. The comps say it should be about $380,00 but there is NOTHING for sale that is clean with a decent yard in this price range. We had 26 showings in the 3 days and it will sell for over $400,000, the only question is how much. One desperate buyer had her mother call me to see if I could help her get the property. Any good agent in town can give you similar stories-under $500,000 in our valley has only 275 properties for sale, and we could use triple that in most cases. The LA Times may report that Redlands is different but Santa Clarita, Antelope Valley, Conejo valley, heck, everywhere else that I know of is super strong in this price range.
Which brings us to the over $500,000 price point. I suggested at last months Economic Forum that our market was “strong under $500,000, between $500,000 and $750, 000 is a mixed bag depending on what you have and over $750,000 is soft unless you have something sharp and with not a lot of competition when you list”. The first two are accurate but I am pleased to report that over $750,000 is seeing a welcome increase in buyer showings and offers. Remember, in January I suggested this segment of the market had been slow for about 7 months. That continued until March and is now changing. In fact homes that were on the market last winter that got no offers came back as new listings this year and in many cases went under contract, with no real change in pricing or improved marketing. There are still more homes for sale (88) than in escrow (41) over $750,000, but that is a very strong ratio for would be sellers. Recent strong sales here include the highest pending sale in Sand Canyon in over 4 years, all of the customs in Westridge selling after being on the market for months, sales in Saugus over $700,000 that represent record highs and every home in Southern Oaks going under contract almost immediately between $800,000 and one million. With that said, none of these were cash buyers as the Times suggested and behind the headlines there is always local markets that have unique dynamics.
Specifically, Santa Clarita isn’t Manhattan Beach-our buyer pool and our inventory are completely different. Further, we aren’t anything like Redlands either. What we are is an area driven by buyers and sellers that couldn’t find what they were looking for in other areas-especially the San Fernando Valley. That buyerhe move up buyer, good schools, quality lifestyleOne of the best ways that I gauge our market is by networking with all the top agents in town. We discuss new listings and whether we think they are priced right etc. Tellingly