The Real Estate Report

JANUARY 2023 SANTA CLARITA VALLEY BUSINESS JOURNAL · 19

Realtors Optimistic For New Year

BY PERRY SMITH

SCV Business Journal Editor

In addition to fewer listings on the market for over the same time last year, the Santa Clarita Valley real estate market saw the average list price dip ever so slightly for the month of November, according to data from the Southland Regional Association of Realtors.

There was also about a 48% reduction in the number of listings, compared to the figures for the same month last year.

The numbers for November, the most recent data available, indicate that there were 165 new listings for the market, compared to 316 for the same time last year. The median list price for November 2022 was $789,000, compared to $799,000 for November 2021.

The number of listings was also down compared to October 2022, which had 249 homes hit the market.

A number of factors play a role in the trend, according to the experts, who also noted that statewide, sales have declined for 15 straight months on a year-over-year basis, with last month being the third time in four months sales have dropped by nearly a third from the same time last year.

“With interest rates rising rapidly since the beginning of the year, buyers and sellers are having difficulties adapting to the market’s new ‘normal,’” said CAR President Otto Catrina in the organization’s monthly Real Estate Report. “As the market continues to evolve in the next 12 to 18 months, Realtors will be playing an ever-more important role as trusted advisers to guide their clients through the complicated buying and selling process and help them overcome their obstacles during these challenging times.”

Craig Martin of the Craig Martin Realty Group noted the challenges seen by some this past year, but he anticipates the market correcting and returning to a “new normal” in 2023, albeit one with a little higher interest rate than a buyer might have been used to in recent years, especially the historically low rates seen during the pandemic.

In the short term, he used the example of a neighborhood in Canyon Country to explain the significant impact sellers were seeing from how the Feds’ interest rate hikes impacted the market.

“(During the summer), we had a three -bedroom home, 2,000 square feet in Canyon Country sold for $860,000. The one across the street ... we put their home on the market three months later, their home was 2,500 square feet, and we got them $765,000, and that took four months to close, and people just got scared,” he said.

Noting the market started to level off toward the end of the year, due in part to inventory, as well, he said, but he added that it’s hard to find a better long-term investment than the Santa Clarita Valley real estate market.

“And now we’re seeing people come back to the market, and I do think we’re headed in the right direction. I do think that’s because the Fed is starting to slow down (on the rate hikes),” he said.

“I think that by the time we’re getting into January, February, March and April, we’re going to start seeing the market pick up a little bit.”

Local Realtor Bri Waterman-King said she’s optimistic about the direction the market is headed, but she’s still hearing frustration from homeowners who are disappointed that a home’s suggested list price is not matching what it would have been even four to six months prior.

Tee problem is, she said, that if you look at an appraiser’s valuation from about six months ago, you have to remember that interest rates were 2% lower at that time, meaning a buyer’s monthly payment could be as much as $1,500 more today than it would have been then for the same home.

“And I have people literally offended that I’m telling them their house dropped by 10% in a year — and it has, but it’s not because the value is not there. It’s because the cost of money is more expensive,” she added.

In keeping things optimistic, she said she was hoping the Fed would leave the interest rate in the high 4’s or low 5’s to keep things stable. There were a number of hikes in 2022, which saw the rate hit its highest point in 15 years on Dec. 14, when it hit a target of between 4.25% and 4.5%.

“What I’m hoping for is a quote-unquote ‘normal market,’ where if we could just pick a rate and stay relatively steady,” Waterman-King said. “I think we’re gonna see housing prices stay pretty stable and maybe increase a bit as the statistics have some time to gain some actual momentum and hold some true value to their numbers.”

That might just come true, as the expected endpoint for rate hikes, or the “terminal rate,” was identified last week as being around 5.1%, according to the Federal Open Market Committee, although if the last few years have taught agents to rely on anything, it’s the potential for uncertainty. 

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