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Wall Street Drama
How it Affects Local Real Estate
November, 2008 - Issue #49
Wall Street may be in New York, but most people want to know how the stock market drama will affect local real estate in Santa Clarita.

Let's take a quick look at what's happening in our market. First of all, while most markets around the country have a rising number of homes hitting the market and skyrocketing inventory levels, we are seeing the exact opposite here in Santa Clarita.

Our inventory has been decreasing steadily month after month. With that said, nearly 52 percent of the homes on the market are either foreclosures or short sales, leaving "normal sellers" in the minority. While most markets are experiencing a slow down in sales and a shortage of buyers, we are seeing increasing sales with a huge pool of buyers. With that said, these buyers are only seeking out the best deals on the market - which seem to be under the $500,000 price mark (and typically bank owned/REO/foreclosures).

Another factor that has been driving recent sales has been the attractive lower interest rates. Buyers who were waiting for prices to fall further have decided a lower interest rate makes now the perfect time to purchase a home. Investors are also back on the scene, as low interest rates and extremely low prices means positive cash flow on rental properties. Fantastic long-term buy-and-hold investments are everywhere!

It seems like we have our own micro-market here in Santa Clarita. Our market is very independent from the rest in Los Angeles County and we seem to recover quickly from the sharp highs and lows of the normal real estate cycle. Buy low and sell high is the rule of the stock market and the same is true in real estate.

Joshua "Dr." Suess is owner of The Focused On Your Family Team with Re/Max of Valencia, 702-4640; www.NoHassleNoRisk.com

SCV Real Estate Update
Average sale price
November 2007: $551,600
Current average sale price: $406,498
Bottom Line: The average sales price is down approximately 26 percent from last year.

Average days on market
November 2007: 112
Current average days on market: 75
Bottom Line: Homes that have sold this year have been on the market 37 days less, or are selling 33 percent faster, this year.

Total closed sales
November 2007: 2,365
Year to date, 2008: 2,065
Bottom Line: There have been 300 fewer sales this year, or 13 percent fewer sales.

The Bright Side
The positive data in the residential real estate market is that, proportionally, home sales in the Santa Clarita Valley have increased 22 percent and inventory levels have decreased 24 percent as of July 2008 from the same time a year prior, according to the Southland Regional Association of Realtors. Home buyers are actively buying up the standing inventory of homes, whether they are bank owned or a standard sell. As the bank-owned and short-sale properties continue to sell, there will be more stabilization of home prices and a return to normalcy within the real estate market.

Jennifer Thompson is a Santa-Clarita-based agent with Regal Realty of California, 295-8715; www.regalrealtyca.com

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