Homes Sales jump in Santa Clarita Valley

Sales of existing single family homes in the Santa Clarita Valley (SCV) jumped a whopping 22.2% in October, while the overall California home sale market increased by only 3.1%. Existing home sales rose by 7.3% and condo sales rose by 28.8% from September to October in the SCV.

As parts of the SCV are nicknamed “Awesometown,” this suburban region just north of the Los Angeles Basin is a highly desirable place to live. With homes more affordable than ever and record low interest rates on home loans, the local SCV single family home market is performing better than the San Fernando Valley, where the median price of homes that sold last month was $350,000.  

Multi-family construction is up throughout L.A. County.  However, permits for single family housing still rule the Santa Clarita Valley. Single-family construction has historically been more consistent than multi-family projects.

Very few distressed/bank owned residential land assets are currently available for sale in the Santa Clarita Valley.

Source: Michel Faris, Marketing Consultant, (949) 852-8288 x14


It’s Always Sunny in Victor Valley

In the Victor Valley submarket, three residential land deals have closed escrow since August of this year.  Two of the deals were distressed, and all three were considered to be undervalued by their purchasers. 

  1. The first sale consisted of 276 single family lots in Victorville that sold to a private investor in late August.  The investor bought the land from a lender in “blue-topped” condition with a recorded final map. 
  2. The second project included 244 unimproved single family lots with an approved tentative tract map.  A private investor bought this Victorville project from a private homebuilder looking to generate cash and divest from some fringe markets.
  3. The third project closed escrow just this week.  A private investor purchased 36 single family lots, four model homes and seven standing inventory homes in Hesperia from a lender.  The buyer intends to finish the homes and sell them to homebuyers at retail prices.  It plans to hold the unfinished lots until the market recovers.

The larger story here is that the buyers of these properties are typical of the groups looking to buy land in the Victor Valley right now.  All are well-capitalized private investors looking for long term (4-10 years) investment opportunities.  These buyers are coming to the table with cash and are taking advantage of the extremely depressed land values in the region.  In many cases, active Victor Valley investors are utilizing overseas investors to get their deals done.

Land Advisors Organization, which has been tracking residential land values in the Victor Valley for about fifteen years, currently sees values at about $42,500 per single family lot in “finished” condition (7,200 sq. ft. lots).  At the market peak in 2006, these same lots were trading for about $130,000 per lot (a 67.3% drop from peak).

Despite the dismal news in land values, recent data shows that many Victor Valley residents are choosing to stay in the area.  In some areas, populations within the submarket are actually increasing.  People are moving into the area to take advantage of the affordable housing and increasing job growth opportunities.

Users of industrial facilities are also taking advantage of the low prices.  In September, United Furniture Industries (UFI) signed a lease for over 505,000 square feet of industrial space from Sterling Capital Investments in the Southern California Logistics Centre (SCLC).  When this new space is occupied, UFI plans to employ 400 local Victor Valley residents over the next 36 to 48 months.

Source: Randy Coe, CCIM, Senior Marketing Consultant, (949) 852-8288 x18