Friday, February 6, 2015

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.

No comments:

Post a Comment