FEAR DOES NOT DISCRIMINATE!

Normally, I only use this platform to discuss real estate related issues but today just feels right to talk about another issue that has been on my mind.  Fear is an incredible motivator.  Fear can be our greatest protection as it causes our bodies to response to some element that appears to be a threat.  It causes that "fight or flight" response.  Fear can be our greatest creator or fear can destroy our drive.  Fear can motivate us to change or fear can be debilitating.  Fear can turn the strongest of us to jello and it can take the weakest among us to hold the world on their shoulders.

You see, fear doesn't discriminate.  It doesn't care if you are rich or poor, black or white, strong or weak, Christian or Muslim.  Fear takes over our bodies and causes a response.  Fight or flight? Kill or be killed?  Walk away or jump into the fray?  Speak or be spoken to?  Rise up or or accept?  Choose sobriety or addiction?

The great philosopher Walter White said (actually Bryan Cranston said it but I can only imagine him saying it as Walter White), "[Fear] is the real enemy. Get up! Get up in the real world and you kick that bastard as hard as you can right in the teeth."

I was told by someone not too long ago, whom I greatly respect, that you shouldn't tell other people's stories.  It's hard to tell my story without telling other people's stories because every person I interact with, even if it's just for a second, have shaped my own story.  But, today, I have fear.  I have fear that I will someday run out of money.  I have fear that I'm not on the right path.  I fear that my kids have to grow up in a world that is much more difficult than the world I grew up in.  I have fear that I may never impact the world in the way I had imagined I could.  I have fear that I may not be the best husband to my wife, father to my children.  I have fear that my mistakes might outweigh my successes.  I have fear of judgement day. 

Maybe that is the greatest bond each of us have as humans?  Maybe that is what we can all rally around?  America's response to 9/11 is outlined as one time in recent human history where we all came together to fight rather than fly away.  Why?  We all feared that what happened to those in New York might actually happen to us and we wanted to come together to do everything we could to stop it from happening again.  I fear that we are being torn apart by our fear of each other.  Instead, let's see that we are all afraid.  Let's use that fear as a way to come together to acknowledge our fears, to determine what is real and what is fiction.  Maybe, just maybe, we can use it to come together while we continue to bleed in the streets.  

Today, I have a choice.  Do I allow fear to control my circumstances or do I rise up and thrive in the face of "the real enemy"?  Today, I stand up and kick that bastard in the teeth and make my life happen rather than allowing life to happen to me.  Stand up with me today and choose to jump into the fray with your brothers and sisters who share your fears.  

Sure doesn't feel like a bubble!

Over the last few months I have seen a variety of different articles talking about speculation that the real estate market in Southern California and other markets are looking like potential bubble markets.  But, over the last few days, I have had a chance to look at some of the numbers at I thought I would share them with you.  First, below is a chart which outlines the Median Values in Ventura County over the last 15 years.  I have highlighted the time period from approximately 2003 to 2007 where we did experience an actual bubble.
 
If you look at values in May/July of 2001 and compare them to values in May/July 2016, it reflects an unadjusted annual growth rate of 7.4%.  While this is still historically higher growth rate than we have experienced in the past, it is also important to look at recent history for any additional signs.  The average sales price in Ventura County is up only 2% from the same month 2 years ago.  In addition, the average price for July sales in 2016 is actually down by 2.4% from July 2015.  You can see the stability in values in the chart below which outlines the average active list prices and the average sales prices in Ventura County over the last 13 months.


This stability has been nice for everyone after a long time in very unstable markets.  So, where do things go from here.  Well, certainly over the next 3-4 months, I would expect that activity levels would continue to trend lower, active list prices to trend slightly higher to stable and sales price to do the same.  The real question will come post-election to see how the overall economy withstands a presidential election in which nobody appears to happy with their choices.  Having said that, I will say that over the last 12 months, inventory levels based on the number of Closed Sales has run from as low as 1.8 months to as high as only 2.8 months.  These levels are still incredibly low and would normally predict higher values in the near future.

If you would like an evaluation of your specific neighborhood or a valuation on your particular home, please call me ASAP for a confidential evaluation of your property and your real estate goals.  #johnsoldmyhome.

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.

Good news for Real Estate..."appropriate policy accommodation"!!!

The stock markets finished the day up 421.28 points yesterday preceded by a good day before that.  It was the largest 2 day gain we have seen in over 3 years.  So what's everyone so happy about?  The Federal Reserve issued their monthly Federal Open Market Committee meeting Press Release where they basically gave all good news.

1. Economic activity is expanding.
2. Labor market conditions continue their improvements.
3. Solid job gains.
4. Lower unemployment rate.
5. Household spending is rising moderately.
6. Businesses are expanding their fixed investments (i.e. their spending money).
7. Recovery in housing continues.
8. Measures of long-term inflation remain stable.

Sounds good to me.  There was basically no bad news in the Press Release.  But, in addition to that, there were 2 key phrases that the stock market cheered.  The first was "The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace...".  What this means is that the Federal Reserve will continue to keep interest rates low.  The stock markets keep thinking that if the economy continues to improve, the supports that the Fed has put in place to carry the economy through the latest recession...mostly keeping interest rates low and buying lots of mortgage-backed securities...will begin to end.  Every time the Fed says things will continue, Wall Street looks at it as free money.

The second phrase in the Press Release from December 17th was "...the Committee judges that it can be patient in beginning to normalize the stance of monetary policy."  This means, first, that the current policy isn't normal.  For interest rates to be this low and for the Fed to be investing so much money in buying MBS', is unusual.  It was a response to an economy in recession.  Most are defining now that the Recession began in December of 2007 and ended in June or July of 2009.  But, you see, that's really the point.  That is really why Wall Street continues to cheer inaction by the Fed.  The Recession ended 5.5 years ago and the Fed continues to prop up the economy.  There are all sorts of questions as to whether or not the gains in the economy are real are just based on the Fed's loose policy.  But that's not what I'm here to answer for today.

The news from the Fed is great for real estate because it means that those First Time Homebuyers who have been sitting on the fence, either because of the lack of confidence in their own job status or because of their doubts about the real estate markets, it gives them more time with lower interest rates to get in the game.  This is what will really bring some stability back to the markets.  While we have worked through most of the distressed sales (foreclosure activity continues to decline back to normal levels and Short Sale activity continues to decline) the last piece to add to get us back to stable growth is adding this First Time Homebuyer.  The Millennials are the ones who don't seem to be participating yet and that is understandable.  Millennials were the largest buyers of homes during the most recent housing boom/bust cycle and it would tend to be reasonable to say that they then were the most heavily burned.  But even if they did not participate or get burned by the recent market crash, they sure saw the pain first hand.  Lack of jobs, moving back in with Mom and Dad, rental rates skyrocketing and heavy Student loan obligations and a continued tight lending market are all reasons for this group to not prioritize housing.

But the Fed's stance on keeping rates low keeps the window open for this group to jump back into a market that has always served our nation and our local communities well.  In Ventura County, in cities like Camarillo, Thousand Oaks, Newbury Park and even Westlake Village and Santa Rosa Valley, home-ownership is one of the things that creates stability and community.  It is the American Dream.  Even though it costs more today than every before, I still believe in the benefits of the American Dream and, apparently, so do the people who serve of the Federal Reserve. We thank you for your patience.