Great news for Ventura County Real Estate!

Now that we are almost halfway through June, I thought I would take a look to see where things stand with real estate values and overall real estate activity since the beginning of the year and compare things to last year.  If you own residential real estate in Ventura County the news is good.

VENTURA COUNTY SINGLE-FAMILY SALES

JANUARY TO MAY 2014 VS 2015

Some of the highlights...

• The total number of sales are up almost 17.5%!
• The total volume of sales is up by almost 26%!
• The average sales price is up by 7%!  
• Averages 2014 - $638,634 to 2015 - $682,831!

Some of the details...

• The rich get richer...homes valued at $1,000,000 or more was the leader in the activity increases with activity up by 35% and overall volume of sales up by 38%.  (See the first chart below.)
• Homes from $400,000 to $1,000,000 also had nice increases as well with sales up by 33% and overall volume up by 23%.  
• The only declines in volume came in homes valued less than $400,000.  Overall sales activity was down by 20% and overall volume declined by 18%.  

The reason the sales activity in the under $400,000 category has dropped is simply due to the fact that their are fewer and fewer of the homes on the market.  You can see below that as of today there are only 50 homes on the Active market in ALL OF VENTURA COUNTY!

The real challenge will be sustaining this activity in the second half of 2015 as it appears interest rates will be on the rise.  If you have been thinking that it might be the right time to sell your home now that values are up, don't hesitate to call me on my cell at 818-391-4131.  I will look forward to hearing from you and to helping you or your friends and family with all of their real estate needs!  

Have a great day!

Jobs, jobs, jobs! Real Estate values on the rise thanks to job growth!

I have been saying for some time now that the real estate markets (and the overall economy) need more jobs in order to sustain and drive values. Over this slow recovery, we kept hearing that, while it felt like things were getting better, we were really being deceived by government intervention with things like stimulus packages, the buying of mortgages and keeping interest rates low.  As these government interventions begin to fade, it appears that the job market might actually be getting better.  For a long time, people wondered if the job creation was strong enough to drive down not only U3, the most commonly used Unemployment Rate but also U6 which also included people that were under-employed.

As it turns out, both of these numbers have come down quite a bit.  U3 is down to 5.5% from its peak in October of 2009 at 10%.  U6 stands at 11.0% which is down from its peak in December of 2009 at 17.1%.

The overall economy is always important because California is usually on the bleeding edge of these changes both positively and negatively, but as they say...all real estate is local! So, if the overall economy is getting better, that's good news but it doesn't mean you are being affected in the same way.  Well, the picture in Ventura County is similar.  As you can see from the graph, the unemployment rate in Ventura County as of February 2015 was 5.7% which is down from its peak in August of 2010 at 11.2%.

Why am I thinking about this today?  I read a report this morning on the Top Employers in each state and I was slightly surprised when I realized that the nation's largest employer is, in fact, the largest employer in 20 out of our 50 States...Wal-Mart!  That's right!  20 States in the Union are the proud owners of Wal-Mart as their #1 employer.

Alabama, Arizona, Arkansas, Florida, Georgia, Illinois, Kentucky, Louisiana, Mississippi, Missouri, Montana, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming.

Fortunately, 16 states had a University or a University Hospital as their #1 employer and an additional 8 had a network of Health Systems/Hospitals as their #1 employer.

In California, the article said that the UCLA Hospital Network was the #1 employer.  Locally, Ventura County is proud to say that its largest employer is our own military with over 15,000 active duty, Department of Defense employees and contractors working out of the bases in Port Hueneme and Point Mugu.  Other large employers in the County are County of Ventura, Amgen, Ventura County Health Care Agency, Community Memorial Hospital, St Johns Regional Medical Center, The Oaks Shopping Mall, Los Robles Hospital, Baxter BioScience, California Lutheran University and several of the School Districts.

So, as jobs go, so do Home Values...right? Certainly makes logical sense, but is it really true?  Clients selling real estate today in places like Thousand Oaks, Camarillo, Westlake Village, Newbury Park, Moorpark, Simi Valley are all benefiting from a declining unemployment rate and, generally, rising home prices.  Below, you will see a very impressive graph created by the people at Calculated Risk.  It outlines the unemployment rates over time compared to Home Values over that same time period.  It's not as clear as I would like it to be, but looking carefully, it does show that as the unemployment rate rises, values certainly begin to decline.  In addition, as the unemployment rates begins to drop, sometimes right away and sometimes a few years later, home values begin to rise again.  This graph is only through January of 2011, but you would certainly see similar results if the graph continued to show the declining unemployment rate and rising home values.

So, jobs, jobs and more jobs! Keep rooting on our economy and our employers so that we can all make more money so that we can buy more stuff at Wal-Mart!!!

If you or someone you know is thinking about selling or buying a home in the near future, please call me for a confidential appointment and evaluation of your own real estate goals.  John Wise, jwise@2ciDirect.com, 818-391-4131.  

Is ZERO the new normal?

Since December of 2008, the Fed has left the Federal Funds Rate at 0%-0.25%.  The Federal Funds Rate is, basically, the rate at which other banks can borrow money from the Federal Reserve.  The basic concept is that if it costs banks less to borrow money from the Fed, it should allow them to lend more money, at more affordable rates, to the consumer.

So, this rate was dropped in December of 2008 in an attempt to stem the tide of the Great Recession.  It worked to some degree, but the real question now is when will it ever rise again?  Or, will it ever rise again?

Rick Reider, a Managing Director for BlackRock, wrote the article "Jobs Report Could Be a Game-Changer for the Fed" and he reiterated what everyone has been talking about every time the economy looks like it has its legs again. That is...the Fed has to raise rates now! Right? But then he goes on to say that with overall inflation in check and some still very core problems with the economy and who it is NOT helping (mainly the low-income wage earner...and much of the middle-class) then maybe they just keep it at ZERO. Isn't 6 years enough to call it the New Normal?  What will happen once the Fed says, yes, let's raise the rate?  The economy will have to be running more than its current walk, and for a more sustained time so that consumers can bear the burden of higher borrowing costs.

Bottom line...it may be the New Normal, but it is bound to change and when it does...it will cost more to buy a home.  Don't wait!  Call me today for a confidential review of your real estate goals.

Update on the Housing Market in Ventura County and Camarillo

In these first few days of February, the markets are feeling better than in times past. Value are up which is good for most existing homeowners and interest rates have continued to remain at historical lows making it a good time for most trying to enter the market or expand their existing real estate portfolio.  While the stock market has recently had some correction, the market has already stabilized after a few days of correction.  This is important because if your wealth isn't in real estate, its in stocks and bonds through your IRA's and 401k's and 529's, etc.  When that portfolio is doing well, you will almost always feel better about taking more risk in real estate.

And that risk has paid off recently!  Values for single-family homes in Ventura County are up by 8.8% from the same time a year ago and some cities are experiencing even greater growth.

Values for single-family homes in Camarillo, for example, are up by 10.5%. However, activity levels are down.

In January, the number of single-family homes sold in Ventura County is down by 1.5% from the same time last year, but it is the lowest number of homes sold in at least the last 5 years.  In Camarillo, the numbers are worse with the number of sales down 8.5% from a year ago and looking back over a 12 month period, they are down by 15.4%.

So, buyer activity is good, but needs improvement.  Many are still not fully committed to buying. Many of the first-time homebuyers (many of which are Millennials) are not pulling the trigger on a home purchase like they have in the past.  Some are just to freaked out by the last wave of foreclosures, many are just now starting to find jobs and feel good about their prospects of keeping their jobs and many just have no plans to buy because they feel it ties them down in terms of job prospects.  In addition, even though lower interest rates have helped the real estate markets, it has also had an affect that I am not sure has fully shown itself yet.  That is, those that own property now, if they refinanced their home at the bottom and are holding a mortgage with an interest rate below 3% or in the low 3% range, they are going to have to really need to move up in order to walk away from it.  As a result, I believe we will see the average time a property is held get extended beyond what we have come to be familiar with.  I can't tell you how many calls I get of current homeowners who want to buy a bigger house, but keep the smaller house and rent it.  That is causing fewer entry level homes to be available and when their are fewer homes available, values have a tendency to rise.  So, entry level demand is low and the supply of entry level housing, both resale and new developments, is lower than we would expect.

But, that has not stopped Sellers from trying to sell into this market.  In Camarillo, the number of single-family homes for sale is up by over 20% from the same time a year ago and over the last 12 months is up by over 42%.  The numbers for Ventura County are almost exactly the same.  So, when your number of sales is declining and the number of homes for sale is rising, the results, generally are a rising inventory of available homes.

In January, inventory levels of homes for sale in Ventura County was up by 21.8% from a year ago and inventory levels in Camarillo were up by 42.7%.  These increased inventory levels are why most economists are predicting values to rise slowly during 2015, but if they continue to rise to higher levels and we don't see more Buyer demand, values, I'm afraid will have to come down.

One additional positive sign is that we continue to see "Bounce-back-Buyers" coming back to the market.  These are people that experienced foreclosures or short sales during this last cycle.  They have re-established their credit, begun to save and are now taking advantage of the reduced timelines for those who experienced this housing distress over the last 6 or 7 years.

It is still a unique time in that it is a great time to buy with interest rates still very low and bound to go up AND it is a good time to sell as values have now almost recovered from their peaks prior to the crash.  If you know anyone who might be interested in taking advantage of this market, please have them call me right away for a confidential real estate evaluation.