Santa Clarita Valley

Newhall, CA Housing Inventories Are at All-Time Lows…So Why the Increase in Days on the Market?

This doesn’t make economic sense…or real estate sense.  If the Days on the Market are increasing, then why are home prices rising too?

Check out this compelling graph of Newhall, CA below.

Usually, the longer homes sit on the market (indicated by the number of days on the market) their median home prices fall.  But currently the converse is happening.

Why?

Well, let’s look into the number of current residential listings on the MLS for Newhall, California.  Right now we have a total of 89 residential properties listed for sale on the MLS, and only 18 are pre-foreclosures.  That’s not a high number of stale Short Sales causing any increase in the Days on the Market or the price.

Rather the prices have risen a bit because the number of available homes for sale continues to be at all-time lows.  And there are a lot of buyers in this market.

…First-time homebuyers.

…FHA buyers.

…All-cash investors.

And they are all trying to bid on the same amount of real estate.

New listings (especially REOs) are coming on the market at higher prices than last year.  This is a sign that the banks and lenders are taking advantage of the low inventory, not necessarily that the real estate market has turned for the better.

The Days on the Market is increasing because many of these “new listings” have been on the MLS for hundreds of days already.  The banks had placed a majority of these homes on “hold” status through the end of last year and these listings are being reactivated as “active”.  Also, many homes continue to fall out of escrow and return to the market due to various issues, mostly failed appraisals.

What are your thoughts on this topic?

Please feel free to comment below.  If we can be of any assistance to you in buying or selling your home, please contact us.