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Housing Brokers See Buyer’s Market on Horizon

After a soft first quarter, San Fernando Valley’s residential real estate market is starting to pick up steam. Eli Tene, principal of Century 21 Peak in Woodland Hills, the No. 21 company on the Business Journal’s list of Residential Brokerage Firms, pointed to signs that a buyer’s market is on the horizon. “In the first quarter, we saw a 45-percent increase in new listings. What does it mean? It means there are more homes on the market than buyers,” Tene said. Because of that, buyers can be more selective. Tene cited fewer instances where properties have several offers at the same time. In Woodland Hills, for example, the average time properties spend on the market is currently around 70 days. In 2018’s notorious seller’s market, it was 32 days. Additionally, Tene noted that prices have fallen significantly in the last two months — home prices at the time of sale are, on average, 10 to 18 percent lower than their listed price. This has led to an increase in sales overall. “2019 started very bad; January and February were extremely bad. We’re seeing more activity in March and April,” Tene said. He referenced a staggering 100-percent increase in sales of Woodland Hills properties between January and March. There, 39 homes sold in January, 43 sold in February and 78 sold in March. Tene said that’s not likely to last, though, and predicts a swing back down in six months. “As long as rates are low, buyers will have more inventory and will use the fact that this is a low-interest environment. Who knows how long until we see this again?” he said. In expensive neighborhoods like Calabasas and Sherman Oaks, activity is still slow. “With bigger tickets, you see them selling less, you see more price reductions and more days on the market,” Tene said. Lower-end properties, he said, are moving best simply because they are cheap. Tene also noted a decrease in new property development and an increase in short sales and foreclosures. Growing population In Santa Clarita, market activity is beginning to ramp up as well, according to David Rendall, owner of Re/Max of Valencia, the No. 8 company on the Business Journal’s list. “It’s no longer a seller’s market. … If you look at overall inventory through the first quarter of 2019, we’re probably up 25 to 26 percent,” he said. Rendall pointed to Santa Clarita’s relative affordability, strong job market and industrial growth as factors that will influence steady population growth over the next few years. He believes commuters working at large companies such as Princess Cruises, Logix Federal Credit Union, Sunkist Growers, Scorpion and Advanced Bionics will realize it’s cheaper and more convenient to live where they work. Santa Clarita’s current residential population is 285,000 — Rendall estimates that number will reach 300,000 by 2021. New housing developments will seek to accommodate this rising population. The Vista Canyon project will bring 1,100 residential units and nearly 1 million square feet of commercial space to Canyon Country. Developer FivePoint’s high-profile Net Zero project, formerly known as Newhall Ranch, will place a whopping 21,000 homes between the 5 freeway, Six Flags Magic Mountain, and the Ventura County line. As for existing properties, Rendall referenced Westridge, Valencia, Woodlands and Summit — areas that don’t have substantial special tax districts or assessments — as in-demand neighborhoods. “All markets are OK here. Price is the differentiating factor,” he said. He noted homes priced between $400,000 and $750,000 are selling well. “I still think the first-time buyer market is going to be a hot commodity because of affordability; 42 percent of homebuyers are millennials aged 24 to 37. That’s the hottest market. Then you have move-up buyers … people looking in the $650,000 to $850,000 range,” Rendall said. For properties priced over $1 million, though, days on market increase and sales slow, he added. And unlike San Fernando Valley, Rendall noted Santa Clarita has a very small market for short sale foreclosures.

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