Housing boom may be finally cooling off
dailynews.com
By Eugene Tong
Staff Writer
SANTA CLARITA -- For Sal and Shelley Mannion, selling their four-bedroom Saugus home of 18 years before retiring to Surprise, Ariz., has been harder than they expected.
The "For Sale" sign has hung outside the 1,500-square-foot home on a cul-de-sac off Bouquet Canyon Road for more than five weeks. About a week ago, the Mannions dropped the price from $449,950 to $429,950.
"I'm sure it will go," Shelley Mannion, 50, said Friday. "It'll take more time. But when you have brokers that are going to be there and they're not after they've just called, it's disheartening.
"The market is not gangbusters anymore."
Across the Santa Clarita Valley, homes and condominiums that may have sold within days just a year ago amid vicious buyer bidding are lingering in a cooling market.
Monica Barkley, a RE/MAX Valencia broker who has sold real estate in the area for more than 30 years, saw more than 10 properties fall out of escrow due to financing shortfalls, and even two dozen seller cancellations in recent weeks.
"Our marketing is close to 90 days, and we're starting to get some price adjustments because the prices are so high and there are problems with people qualifying," she said.
But area homes are retaining gains made in recent years -- the September median for a single-family home stood at $495,000, about 27.6 percent higher than a year ago, according to the Southland Association of Realtors. For condominiums, it was $324,000, or a 22.3 percent gain.
"Our valley's really good," Barkley said. "It's usually the last to move into a bad market and the first to come out."
After peaking over the summer following consecutive years of double-digit gains, the market is gradually correcting itself. A 1,200-square-foot Valencia condominium that sold last month for $264,900 finds similar models netting $272,000 nine months ago, Barkley said.
"(Federal Reserve Board Chairman Alan) Greenspan is trying to hold the interest rate so it doesn't sway the election," she said. "After the election, if they raise the interest rates, it'll adjust to the market.
"It'll be a better market because it's more stable and it's more affordable. Right now, people who are getting into the market, they just cannot afford it."
Barkley said the typical buyers now are likely searching for a condominium in a last-ditch effort to take advantage of still-low interest rates. But they may be overextended with monthly payments as high as $2,000 to purchase a $320,000 property for 10 percent down.
"We have move-up buyers in the area, but not as much as we used to," she said. "Even in the worst market, we'll still have activity. But to what degree, we don't know.
"We have less buyers than we normally do, and the quality of the buyers are not as good. They have less cash to work with. A lot of these buyers are stretched to the limit." When the Mannions moved here from Panorama City 18 years ago, the market was riding another boom. They bought their home for $125,000 after a bidding war.
"When I bought, houses were selling like crazy," Mannion said. "If you line up in the morning and take a second look at noon, it'll be gone. And we sold our house (in Panorama City) in one day."
Mannion only intended to stay a few years in the area, but couldn't find another house of similar value. Then the market cooled and didn't bounce back until the late 1990s.
"It just dropped like crazy, so we decided to stay," Mannion said. "We raised the kids. We've added several upgrades to the house.
"When my husband retired, it gave us a wonderful opportunity."
The Mannions are moving to a city northwest of Phoenix, Ariz., to a two-story, four-bedroom home on a quarter-acre lot that's roughly one-third the price of their current home.
Shelley Mannion believes Santa Clarita has become overcrowded in the last two decades, and wants raise her grandchild in a small town the area used to represent.
"It's getting a little tight," she said.
While market trends are not completely in their favor, Mannion believes they made the right decision.
"I could've put it up earlier, but I have nowhere else to go," she said. "Who wants to be out of a house for five months?"
Barkley agreed.
"This is a really good time because it's potentially the last chance to get a good price," she said. "If they sold two, three months ago, it's better. But right now, it's still at top price.
"No matter what property they move to, it'll go up and down. They can't live by what the market's going to do. |
