A haven at a higher price

first_imgSANTA CLARITA – Once an affordable haven for young first-time home buyers, the Santa Clarita Valley is now a top destination in Southern California with a price to match, where achieving the American Dream of home ownership means great personal and financial sacrifice. The median home price in August hit a record $580,000, according to the Southland Regional Association of Realtors’ Santa Clarita Division. Condominiums are near $379,000, while new tract homes are selling upward of $800,000. Though threats that the housing bubble will burst are never far behind – the California Association of Realtors predicts statewide price gains of just 10 percent in 2006 compared to the estimated 16 percent this year – many prospective buyers are undeterred. Whether they’re singles looking for a first home or veterans trading up, each is determined to carve out their place in a city where subdivisions bare such aspiring names as “Mayfair,” “Bridgeport” or “Montana.” “I’m looking for open space – close, but not too close to your neighbor,” said Melissa Picquet, 32, as she scrutinized a 6-year-old, 1,300 square-foot home in Valencia. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREThe top 10 theme park moments of 2019 Asking price: $519,000 – not a small sum for a young, single woman working in insurance while studying to become a physician’s assistant. The Palmdale native had saved for six months until a death in the family left an inheritance that propelled her into the market. “I’ve been weighing my options and Valencia seems to have won me over,” said Picquet, who currently shares a rental in Chatsworth. “It’s very new, very clean. It seems a great place to raise children if need be. “There’s really nothing wrong with (the San Fernando Valley.) It just seems like it’s busy, busy, busy. Even Valencia – it’s a big place, but it seems more together. It just seems to me it’s more down to earth.” Chris Fall, who wants to trade his four-bedroom home in Palmdale for a larger one in Santa Clarita, agreed. “If we pull this off, I’ll equate myself with George and Weezie – we’re movin’ on up,” he said, recalling that upwardly mobile television couple, “The Jeffersons.” Fall started with a condo on Sherman Way in the San Fernando Valley before buying his first single-family home in the Antelope Valley in 1989. “It was to give the two kids I had at the time what my folks have given me, which is to get a house with a front and backyard,” said Fall, 43, a manager with Blue Barrel Disposal. “I believe we’re living the American Dream – it’s to buy a house and raise them in a relatively safe community.” Now with four children and his Palmdale home worth at least a half million, he’s ready to move again. “I’m really concerned about getting that fifth bedroom,” he said. “I have two boys (sharing a room,) and they’re ready to choke each other. “We’ve also come to the conclusion that the bubble may burst. If that happens – we want to be somewhere where you want to be for a while.” Local real estate brokers have long touted the region’s good public schools, strong resale value and healthy economy as main draws. Many remain bullish, and it’s reflected in the housing market, where prices have seen annual gains of at least 20 percent over the last two years. “Usually, it’s the quality of what they’re getting,” said Monica Barkley, a broker here since 1973. “A lot of areas are just older and are just not that nice. “Up here, they’re going to get new homes that are better buys. The kids here don’t have to go into private schools – it’s a big thing to apply to their housing instead of toward school.” “I don’t see any drop in demand for the next two to five years,” said Mike Davis, president of the association’s Santa Clarita Division. “But there isn’t a bidding war like it used to be. People would just have to price the home to sell.” RISING (AND FALLING) WITH THE TIDE But Mark Schniepp, director of the California Economic Forecast, urged caution. “Certain thresholds are being reached where you have fewer buyers now,” said Schniepp, author of the annual Santa Clarita Valley Real Estate and Economic Outlook. “We are at the highest level of housing production since the 1980s. It is getting absorbed now. At some point in time, this crazy, overzealous demand is going to be met. Six hundred thousand dollars is pretty steep. “I don’t think any market is bulletproof,” he said. “All boats rise and fall with the tide, but there is no area that is going to be immune if demand suddenly goes away. That would occur if the U.S. goes into recession or interest rates suddenly rise, which is not expected, or a cataclysmic event.” Schniepp doesn’t mean a single, sudden jolt as earthquakes or hurricanes – markets tend to bounce back within several years of a major disaster, and stronger than before. Schniepp imagines something out of the early 1990s, when dozens of housing development plans gathered dust at local planning offices as recession and mass layoffs in Southern California’s backbone aerospace and defense sectors effectively killed demand for years. The region today has some diversity in both technical manufacturing and service jobs, and the investment in local industrial parks has encouraged companies from throughout the Southland to relocate here, bringing new capital and more workers with housing demands. “Certainly, the Santa Clarita Valley has momentum going for it, that would help in its desire to achieve a soft landing,” Schniepp said. “But soft is a relative word. We could see a chaotic landing in some communities. I think some of the inland areas where there is growth (are) insulated to some degree.” Macroeconomics aside, most buyers are driven by more practical rewards – tax deductions, security, pride of ownership. They’re willing to take on more risk both personal and fiscal. “They’re not buying a piece of the house – they’re buying the mortgage payment,” said Dolores Conway, director of the Casden Real Estate Forecast at University of Southern California. “They’re comparing the payment to rent. … Payments haven’t gone up as much as home prices, and the interest rates are very, very low, so people can buy a lot more. “They’re willing to assume more financial risk. All these creative financial lending – let’s face it, the lenders won’t be able to do these loans if there weren’t buyers. The lenders are diverting the risk to the buyers.” For Picquet, it means putting up with a commute to Charles R. Drew University of Medicine in South Los Angeles – at least until she gets hired at an area hospital. “Any place that you go from Valencia is pretty much within 20 minutes,” she said. “Any place you’re looking at in California is going to involve traffic, regardless.” TRAFFIC CHALLENGE Despite steady job growth, thousands clog Interstate 5 each morning, commuting to Los Angeles, Ventura County and beyond for lucrative careers – mostly white-collar, middle management work – that allowed them to afford a home here in the first place. Indeed, Schniepp believes traffic congestion is a top challenge regional leaders must address for Santa Clarita Valley to remain a draw. “The detraction of all the quality of life is all the traffic – that’s the biggest risk – the postponement of infrastructure improvements on a growing area,” he said. “You need to keep up with that, and we have not. Other than the housing bubble bursting, that’s biggest issue.” Some fixes include $245 million 8.5-mile Cross Valley Connector road intended as a east-west shortcut between Interstate 5 and the Antelope Valley Freeway. There also are plans to add high-occupancy vehicle lanes and truck lanes on the I-5 near the Newhall Pass. Meantime, developers and city leaders tout growth as a permanent solution – to foster enough local high-paying jobs so residents won’t have to leave. But that could be at least 10 to 15 years away, Schniepp said. “That’s probably a long-range ideal view of it,” he said. “But you can’t force that kind of thing. You can’t create enough jobs fast enough, at least in that intermediate term.” Still, determined buyers like Picquet and Fall are unfazed. “I’ve passed on a number of opportunities to move here,” Fall said. “If I had known what was going to happen to the market, I would’ve bought every one of those opportunities.” “Anything that has a reward is going to take sacrifice,” Picquet said. “I believe it’s one of the biggest American dreams. It’s an investment into your livelihood and independence. I don’t think that’s going to go away.” “If you want to live in California, you’re going to pay a lot for housing,” Conway said. Eugene Tong, (661) 257-5253 [email protected] 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img read more