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Bob Khalsa: Prices, sales rise as SCV’s housing market continues its recovery

Posted: March 28, 2013 2:00 a.m.
Updated: March 28, 2013 2:00 a.m.
Bob Khalsa Bob Khalsa
Bob Khalsa

The residential housing resale market in the Santa Clarita Valley continued to recover during February, with sales and prices up to their highest levels in years.

That stellar piece of good news was reported recently by the Southland Regional Association of Realtors.

The 153 homes that changed owners last month represented a 10.9 percent increase over a year ago and a 2.7 percent gain from the January tally. While typically a slow time of year for home sales, the February figure was the highest for the month since February 2008. Local home sales have increased 54.5 percent from the low point of January 2008.

Likewise, the 69 condos that closed escrow during February were up 25.5 percent over February 2012 and 16.9 percent higher than this January. It was the best total for the month since 2007. Condo sales were up 122.6 percent from the record low of 31 sales set in 2008.

To me it’s clear: Santa Clarita is recovering faster than some Southern California communities because of our demographics and a vibrant economy.

Plus, the entertainment industry continues to expand locally, we’re the only place in L.A. County with significant new construction underway, and we’re the only city in the United States that has eight thriving business parks, with the ninth one approved.

Because of the composition of the Santa Clarita Valley, surviving the full impact of the Great Recession, with the loss of income or loss of a job, it was somewhat easier for people to transition into other relatively well-paying positions.

Now, home prices are on the way up again with demand picking up even in homes priced above $800,000.
The median price of the 153 homes sold last month came in at $379,000, up 5.9 percent from a year ago for one of the highest numbers in two years.

The condominium median price of $220,000 was 13.4 percent ahead of 12 months ago and up 6.4 percent over January. It was the highest monthly median price since May 2011.

I don’t expect a dramatic change in the months ahead in the one statistic that has limited the recovery — an exceedingly tight inventory.

A record low 317 active listings were reported at the end of February, down 63.2 percent from a year ago. At the current pace of sales, that represents a 1.4-month supply; a 5- to 6-month supply would be considered balanced.
Listings peaked with a record high 2,630 listings in September 2006, and have been falling steadily ever since. A precipitous plunge in listings began a year ago February, with each of the last six months reporting drops from the prior year in excess of 60 percent.

Frankly, I don’t see listings picking up for a couple of years, partly because there are still so many underwater owners, but more so because we’ve had a sea change in homeownership in this country.

Now we have a large number of homes owned by investors. They don’t buy and sell the same as a traditional homeowner; they prefer a 1031-exchange to avoid capital gains tax. I don’t see investors just getting rid of the homes they’ve picked up today.

Nonetheless, the Santa Clarita Valley appears to be much improved and poised for a strong summer homebuying season. And that’s good news, indeed!

Bob Khalsa is President of the Santa Clarita Valley Division of the Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.




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