Soaring Prices of SCV Homes Set New Record
Home prices in the Santa Clarita Valley rose 1.9 percent to a median of $580,000 in July — a new record for an existing single-family home locally, a Realtors group said Thursday. . .
In spite of forecasts that prices would begin to level off, the median housing resale price in the valley has risen more than $80,000, or 16 percent, since July 2004, according to figures from the Southland Regional Association of Realtors.
Since July 2001, when interest rates dropped to historic lows, valley home resale prices have skyrocketed more than 118 percent. In addition, an abundance of buyers and speculators, who added more pressure to an already limited housing market, contributed to the record high prices.
Historically, a “healthy” housing market has annual appreciation of 2 to 3 percent.
Despite the double-digit appreciation, it seems doubtful that a housing bubble will develop and pop, sending prices tumbling, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
“We are watching, but it doesn’t seem there is going to be a bubble that would wreck havoc. We see a leveling off (of prices),” Kyser said.
However, Kyser warned that homeowners with adjustable rate mortgages and interest-only mortgages could be vulnerable when interest rates rise.
“Some people holding these risky mortgages could be hung out to dry,” he said. “If I had an adjustable rate mortgage, I would get into a fixed rate (mortgage) soon.”
In the last six months of 2004, adjustable-rate mortgages and interest-only mortgages together accounted for the majority of new home loans nationwide, according to the Mortgage Bankers Association.
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