Real Estate Outlook 2015
Lots of economic indicators left “in the air” as we near the end of 2015 gives pause to speculation about the real estate market.
As we hurtle toward the final month of 2015, we’re seeing some interesting signs in the Santa Clarita real estate market. Interest rates, while still very low, have inched just above 4 percent, and housing prices for both condos and single family homes have leveled off.
That being said, it’s not unusual for housing prices to dip slightly in the final quarter of the year, with the summer buying season behind us and the holidays just ahead. The question still remains, however: Have Santa Clarita home prices reached their peak?
To be clear, prices have only dipped slightly between September and October of this year. The median price of a single family home still holds firm at the half million dollar mark, and condos are averaging prices in the low $300,000’s. We’re nowhere near the peak we achieved in the Spring of 2006, when single family home prices averaged $643,000 before they began to fall at the outset of the recession which began a year later. Continue reading
Mortgage rates will hold steady for the time being.
Slow economic growth over the summer has motivated the Federal Reserve to remain cautious, holding off on
proposed rate hikes for now.
National Gross Domestic Product (GDP) grew slower than expected over the summer. As such, the Fed has made plans to raise the rate of money borrowed by lending institutions in an effort to stave off runaway inflation, based on higher economic projections that have yet to be met.
Good News For Home Buyers
Interest rates have held at under 4 percent for the bulk of past year. As of the date of this article, mortgage interest rates are as follows:
- 30 year fixed-rate mortgage: 3.87%
- 15 year fixed-rate mortgage: 3.15%
- FHA 30 year fixed: 3.60%
- Jumbo 30 year fixed: 3.67%
- 5/1 fixed adjustable rate mortgage: 2.93%
Single family home sales up nearly 16 percent from 2014.
The median price of single family homes in the SCV rang in at $523,000 in August, up 2.7 percent from the previous month, and nearly 7 percent from the previous year.
Condos fell only slightly in August, but are still strong year over year, with median equity increasing by 14 percent from August of 2014.
These numbers reflect continued positive growth in our economy, as well as interest rates still holding at historically low levels. We can also attribute the rise in prices to the still relatively low number of available homes for sale in the Santa Clarita Valley. There was a reported 675 active listings in the SCV at the end of August, which is about half of what would be considered a “balanced” market. Continue reading
Rumors that The Federal Reserve may raise interest rates have not affected the market…yet.
The market is in pretty good shape at the moment, with the recent jobs numbers from the Bureau of Labor Statistics bolstering confidence along many financial lines. Of course, this confidence may eventually lead an increase in inflation; something the Federal Reserve would like to avoid.
So how do we curb inflation as the nation’s economy improves? Many signs point to raising the base rate at which banks borrow money. In essence, this move trips a proverbial “breaker switch” with businesses and financial institutions, causing them to rethink their decisions on raising prices on goods and services. That being said, even a slight push upward in Federal rates will have an impact on the real estate market, even if it’s only temporary. Federal Reserve Chair Janet Yellen has hinted that rates may rise as early as September. Continue reading
As we head dead on into summer, SCV home prices are holding their own.
Can you believe it? We’re halfway through 2015. With that, we’ve seen the Santa Clarita real estate market continue to push forward in a positive fashion. Interest rates are still holding just over 4 percent, and the buyers are out there ready to realize their dream of owning a home.
Recent statistics from the Southland Regional Association of Realtors showed the median price of single family homes and condominiums remained basically the same from May to June of this year. Condo prices did not budge, while single family home averages dropped by a few thousand dollars to a median price of $521,000. This type of fluctuation is not unusual, and is typical of the overall Santa Clarita marketplace during the summer months. Continue reading
New development promises sustainable community and business center with a plan for 1100 homes for SCV residents.
It’s the 21st century. While we don’t quite have the “Jetson” lifestyle with flying cars and apartment complexes in the sky, we do have smart phones,
electric and hybrid cars, and developments that provide a community-centric place for residents to live and work, while being environmentally friendly.
On July 9th, groundbreaking began on a new development that is truly a sign of the times. Located near the east end of the Santa Clarita Valley at Lost Canyon, Vista Canyon will provide a mix of 1100 homes that will include apartments as well as single family homes. The true selling point is that Vista Canyon will be a mixed community that provides a truly immersive experience for those who wish to live within walking distance of work. Innovative and ambitious with the future in mind, this community will also dedicate 1 million square feet of space to retail, dining, businesses, and hotels. Continue reading
Lower interest rates over the past few years have saved homeowners a lot of money, but how long will it last?
For the past several years, the Federal Reserve has aided the real estate community by maintaining the rate at which banks buy their money at nearly zero. To be clear, this is the starting wholesale point for lenders who borrow money from the Federal banks, and not the borrow rate for home buyers.
That being said, these low interest rates have helped maintain the real estate market through the worst of the most recent economic recession, and many claim that this strategy was one that staved off a major real estate collapse.
The Pros of Low Interest Rates
Of course, it sounds like we’re stating the obvious. Low interest rates are ALWAYS a good thing, right? It helps borrowers increase their purchasing power when buying a home, and allows homeowners the opportunity to refinance their mortgages at a lower rate. This saves both buyers and refinancers a ton of money over the long term. A win-win, right? Continue reading
Yes, Spring is still in the air, but timing is everything when it comes to buyers and sellers realizing their real estate goals.
There’s been a lot of good news in the Santa Clarita real estate market lately. Not only have single family homes topped the $500,000 mark for the first time in 8 years, but interest rates are still holding below 4 percent…establishing what we might call a “win-win” scenario for both buyers and sellers.
While we’re still smack dab in the middle of Spring, many buyers and sellers “on the fence” should take this time to consider the fact that Summer is one of the best times to buy or sell. Why?
First of all, for the most part, kids are out of school. Parents find it much easier to move in between school sessions. Also, it is the time right after tax season that many renters are reminded of the potential tax savings as homeowners. Conversely, those who have received tax refunds have cause to think about investing it in something that will give them a long term return. Continue reading
Median price of single family homes takes a 6 percent swing upward from February.
The Santa Clarita real estate market showed signs of a continued rebound when statistics recently released from the Southland Regional Association of Realtors showed the median price of a single family home reached $520,000 in the SCV in March. This represents a slightly higher than 6 percent median equity increase over the previous month.
To put it more plainly: Single family home prices rose $30,000 in one month!
In fact, home prices have risen nearly $60,000 since March of 2014, which begs the question yet again: What other investment can you make that will net you an equitable return of this magnitude in 12 months?
Leveraging your money to leverage equity.
Say, for example, you purchased a home in Santa Clarita in March of 2014 for the median price of $462,000. Now, if you obtained what we call a conventional fixed-rate mortgage using a 20 percent down payment ($92,400), then in one year you’ve technically made back nearly 2/3 of your cash investment. Continue reading
It’s a great time for both home buyers and sellers in the Santa Clarita Valley.
First of all, with available housing inventory on the lower side of nominal (somewhere in the mid 500’s), most sellers are confident that they can sell their home relatively quickly at market rates, which climbed nearly 15% in 2014.
Mortgage rates have bumped up (very) slightly, but are still well below 4 percent, which is great news for both buyers and sellers? Why is it great news for sellers? Well, for the most part, many sellers turn into buyers once they have their home in escrow, so the “win-win” is in full effect. Homeowners are excited as well, being able to take advantage of lower rates to refinance to a lower monthly mortgage payment, or access equity to make home improvements or other investments. We’re continuing to see mortgage loan applications jump as a result of low interest rates. Continue reading