Santa Clarita, California Real Estate: Buyers Return to Due Diligence Amid Rising Costs

Written by:

Steve Marcinuk

Date:

03 Apr 2026

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The Santa Clarita Valley real estate market is returning to pre-pandemic fundamentals. Buyers are once again scrutinizing deals, conducting thorough inspections, and negotiating repairs. After several years of waived contingencies and rapid transactions, today’s buyers are more cautious. High interest rates and rising insurance costs are eroding purchasing power and reshaping what buyers can afford across Southern California.

Michelle Alonso, REALTOR® of Alonso Real Estate Group at RE/MAX Gateway, has tracked these changes over the past several years. Her team operates in a market known for its suburban appeal, just 20 minutes from Los Angeles, attracting buyers who want more space and better value than the San Fernando Valley offers. “A single-family home in San Fernando that may cost a million dollars is probably going to be $200,000 to $300,000 less in Santa Clarita for just a little bit more travel time,” she says.

Financial Background Shapes Alonso’s Approach

Alonso’s real estate career began in 2017, following a background in finance and mergers and acquisitions. She joined her husband’s growing real estate business, bringing a financial perspective that has become central to how she advises clients. Alonso helps buyers determine realistic budgets and understand the full scope of monthly costs, emphasizing transparency from the outset. “We’re very transparent and upfront,” she says, adding that her financial expertise has become a key differentiator in building trust with clients.

The Alonso Team has expanded methodically, now including an operations manager, a transaction coordinator, and three additional agents who manage both buying and listing duties. This structure allows the team to maintain high service standards and handle more transactions without sacrificing attention to detail.

Santa Clarita Market Overview

Santa Clarita encompasses six major communities: Newhall, Canyon Country, Saugus, Valencia, Castaic, and Stevenson Ranch. The area offers a range of housing options from custom ranches to new developments. The area gained momentum during the pandemic, as remote work enabled more families to prioritize space, value, and school quality over proximity to Los Angeles.

Today, high prices and elevated mortgage rates have become major obstacles for buyers. “We’re stuck with high prices and high interest rates right now, and that’s been a hurdle for a lot of people,” Alonso says. Many buyers are concerned about becoming house poor, with mortgage payments consuming so much of their budget that little remains for other expenses.

Despite these challenges, well-priced and properly maintained homes still attract buyers. “If you price a house well and it shows well, if you’ve done the maintenance and haven’t deferred anything, those properties are still going to sell,” she says. Sellers who ignore repairs or overprice their homes are seeing listings linger.

Buyers Return to Due Diligence

One of the most notable changes in the market is the renewed importance of due diligence. During the pandemic, buyers often waived inspections, appraisals, and loan contingencies to compete in bidding wars. That urgency has faded. Today’s buyers are more deliberate, carefully reviewing inspection reports and negotiating repairs or credits before closing.

Alonso describes buyers as more cautious in their spending and more attentive to the long-term costs of homeownership. Issues that might have been overlooked during the pandemic, such as roof condition or deferred maintenance, are now deal-breakers or points of negotiation. In a recent transaction, buyers discovered a full roof replacement was needed. “Most buyers don’t have the extra money for major repairs after making a down payment and covering closing costs,” she says. As a result, sellers are increasingly expected to address significant issues or adjust pricing to reflect repair needs.

Fire Risk Raises Insurance Costs

Fire risk is a persistent concern in Santa Clarita, and insurance costs have become a significant factor in buyer calculations. “Santa Clarita is considered one of the highest fire zones,” Alonso notes. The region regularly experiences wildfires, and insurance premiums reflect that risk.

Annual insurance costs start around $3,500 for an average home, but can climb to $9,000 or more for properties near the mountains. “That’s an additional $700 to $750 a month compared to similar homes elsewhere,” Alonso calculates. These higher costs directly reduce what buyers can afford and have limited price appreciation in Santa Clarita compared to neighboring areas like the San Fernando Valley.

Many buyers are forced to use California’s FAIR Plan, a state-backed insurance pool, when traditional insurers decline coverage. The FAIR Plan typically requires a supplemental wraparound policy, which further increases monthly expenses and complicates the closing process.

Distressed Properties Attract Investors

While owner-occupant buyers face affordability challenges, Alonso sees new opportunities for investors, particularly in distressed properties. “We are seeing a little bit more short sales and foreclosures,” she says, attributing this to the end of pandemic-era foreclosure moratoriums and lingering financial strain from COVID-related forbearance.

Alonso advises investors to look for properties with at least a 15% margin to account for unexpected renovation costs. “You never know what happens behind the walls until you start the work,” she cautions. Investors who can navigate these risks have an advantage in acquiring and updating neglected or outdated properties.

A significant portion of these opportunities comes from legacy properties, homes owned by baby boomers who are equity-rich but have not kept up with upgrades or maintenance. As these owners look to downsize or exit the market, investors are stepping in to purchase and renovate these homes, often bringing them up to current market standards.

Rate Swings Shape Buyer Decisions

Recent months have brought volatility to the Santa Clarita market. In late February 2026, mortgage rates briefly dipped below 6%, triggering multiple offers on previously stagnant properties. Geopolitical events quickly pushed rates back up, stalling momentum.

Buyers are closely monitoring rate changes and quick to act when costs drop, even by a quarter or half a percentage point. “The buyers are there. They’re just more self-aware of what they can save when rates dip,” Alonso explains. Still, Alonso advises clients not to wait for ideal conditions. “If you find the home now, lock it in. If rates go down later and you’re in a good loan scenario, you can always refinance.”

Alonso’s approach emphasizes buyer education over market timing. She urges clients to focus on affordability and long-term needs rather than chasing rate fluctuations. “Don’t worry about the rates. If it’s affordable, go with it. You can always refinance later,” she says.

Takeaways for Buyers and Agents

Santa Clarita’s current market underscores the need for transparent communication and careful preparation. Buyers must factor in not just purchase price and interest rates, but also insurance premiums, maintenance, and potential repair costs. Sellers need to recognize that buyers are less willing to overlook flaws or accept inflated prices.

For agents and real estate professionals, Alonso’s experience highlights the value of a financial background and a consultative approach. Helping clients understand the full cost of ownership and preparing them for negotiations around inspections and insurance has become essential in today’s environment.

The Santa Clarita Valley is likely to remain attractive for buyers seeking value and space near Los Angeles. Success will depend on realistic pricing, property condition, and a clear understanding of all costs involved. As the market continues to respond to interest rate swings and insurance challenges, both buyers and sellers must adapt their expectations and strategies.

About the Expert: Michelle Alonso leads The Alonso Team at RE/MAX Gateway in the Santa Clarita Valley, California. With a background in finance and mergers and acquisitions, she has specialized in residential real estate since 2017, advising buyers and sellers across Santa Clarita’s five major communities.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.