It was last April that I shared that something very unexpected was happening. Inventory was dropping and we saw buyer confidence rise to levels that we hadn’t seen in years. Everyone expected 2012 to be another year of decline, but that did not seem to be happening. It was 9 months ago that I confirmed the trend with you and shared that as soon as distress sales made up less than 30% of our inventory, appreciation would have to occur, even if we still had lower priced short sales and foreclosures on the market. It was last summer that appreciation became obvious, especially in the lower price points. 4 months ago I offered specific examples of “regular sales” at prices more than 30% higher than recent distress sales and suggested some agents were testing the market to see what was possible. The Tesoro home that I mentioned in that post (priced at $735,000 versus model matches on the same street that were short sales priced at $500,000), will close escrow tomorrow
Neal's Blog
For years I have started the New Year with suggestions about what we might see in Real Estate in the New Year. This year, because of what we have been through in the last 7 years and the uncertainty that still remains, I am cautiously optimistic for what may occur with property values. Specifically, there are 3 very recent changes that point to more than what many experts are suggesting will be only “modest” appreciation this year. In fact, if these 3 changes continue, coupled with the low inventory we have experienced for the last 9 months, who knows what may happen! All 3 of these changes have the potential to really affect upward pressure on pricing in all price ranges and in all parts of town. Read on to understand why. I made the comment in my last post that appreciation will clearly occur when the amount of distress sales gets below 25% in our valley. In 2012, it was about 40% of the closed transactions. However, the difference between the first quarter of
As the national media have finally suggested, available homes for sale are at record lows in many markets in the United States. Today in Santa Clarita we still have just over 300 homes for sale, a number so low that prices should be skyrocketing as I write this. But they aren’t and it will take some time for “good comps” to replace “bad comps” and the market to really start to appreciate. I am convinced it will happen and if you want to know when, it will likely be when the percentage of distressed sales is under 25%. We have gone from over 80% distressed sales 4 years ago to just fewer than 40% today, so it is coming. In the mean time we have an opportunity that we have never really seen before. Specifically, we have many “standard” sales selling at top dollar, while in the same neighborhood, ‘short sales” are selling for 10-20% less. This has led to many would be sellers putting their home on the market at
In my April post titled “Where are all the Homes”; I finished by suggesting that the next 3 months would tell us a lot. Well, it is exactly 4 months later and what might have been a temporary cycle is now an unquestionable shift in the market. To recap, a year ago there were 1100 homes for sale, 6 months ago it was about 800 and in April we had 630. Sensing there might be a late “spring selling season” with lots of homes coming on in May-July, I suggested “wait and see”. Today there are 410 homes for sale in the entire Santa Clarita Valley, the lowest number I have seen since I started tracking in the 1990′s! Until this year I speculated that because of the relatively high number of short sales and foreclosures in our valley, it would be at least 2 more years to get them through the system and normal appreciation might follow. I no longer think that. Besides what I see in the field (multiple offers on most of my listings, agents begging
Whether you are Selling or Refinancing your home, your success is often ultimately decided by an Appraiser. I have had hundreds of clients call me over the last 6 years wanting to Refinance, but unable to do so because their home did not have enough equity. The government knows this too. That is why last year a game changing Refinance plan was introduced for many homeowners - Refinance even if value is upside down! Today, though, I am going to speak only to Real Estate Sales in which a buyer wants to buy and a seller wants to sell. These Sales - not Refinances - are what affect your value as a homeowner. This post will explain why Low Appraisals are killing many deals - MANY DEALS - and frustrating both Buyers and Sellers alike. Recently I suggested that low priced Short Sales will actually prevent the market from appreciating the way it normally would. I also suggested that with our inventory extraordinarily low, appreciation would be commonplace if not for
In my last Blog I commented that the reason why prices wouldn’t noticeably appreciate this year was due to distress sales, especially Short Sales, preventing that from happening. I suggested that as long as we had a lot of Short Sales, currently about 50% of our inventory, they would “prevent” the normal appreciation we might see. Real Estate is always a Supply and Demand business and I’m going to suggest that something unexpected is happening with Supply right now – it is lower than it was last month and lower than it was last year at this time. It is too early to tell exactly what this lack of Supply will mean long term, but in any other climate it would be a clear mandate that appreciation was imminent. Of course, after the last 6 years, no one wants to predict anything until it is 100% OBVIOUS. Stay with me on some trends that have me more encouraged than I have been in years! Let’s start with pure statistics. Today, in our valley of well
