Second straight month Simi Valley Home Sales drop – Inventory edging up
The Simi Valley Real Estate market may have more personalities than Sybil. December saw the highest closed sales for single family detached homes in Simi Valley for 2009 with 98 closings. I believe that year end accounting for many of the corporate sellers influenced the uncharacteristic high volume for December. January followed with 74 closings and now February with 59.
I have been pretty emphatic that this will be a bumpy recovery so let’s look at the mixed signals.
This information is for single family detached homes in Simi Valley only. The reason why I leave out the condos and town homes is that HOA dues coupled with requirements for FHA and VA financing have influence on those sales that we do not see on Single Family detached homes. Also, single family detached homes are affordable which is redirecting demand away from the townhome/condo market.
2009 Monthly volume slightly picked up to an average or 80 closings per month over 2008’s 78 closings per month.
Conventional 20% down Buyers and All Cash Buyers in February controlled 74.5% of the purchases
Inventory has increased 15% over the last couple months.
The most active segment of the market continues to be in the under $500,000 purchase range.
List to sell ratios in the entry level homes was almost 100% until recently. Now these home are selling approximately 97% of the original list price.
Average Sales Price showed signs of stability last year and had a slight increase over the last 12 months.
Historically low interest rates help affordability and stabilize pricing.
Federal Tax incentives.
Looking at the closings for February and any likely trends, we see that in 2006 there were 112 closings, 2007 there were 75 closings, 2008 there were 53, 2009 there were 60 and this year (2010) 59. Anticipating that a few sales will report late, even if that number moves up 5 closings, we can see nothing really significant is going on with the Simi Valley Housing market to signal a full recovery.
As encouraging as the average pricing has been, I think that there are too many other factors that could influence the market at this time. I doubt that any huge drop in pricing is eminent as last year saw some incredible buys that cannot be duplicated at this time. For example, I sold a house on Hope street in east Simi Valley last year. The sale price at $252,000 for 3 bedrooms and 2 full baths would be bid up today near $300,000 if available.
I can only reiterate – if you are looking to buy a house to live in, possibly raise a family, then a long term buy and hold is the mindset for this market, If you are looking for a short term turn around, then an open market purchase will probably not work with your goals and you will need to evaluate where to participate for properties that can be purchased under market value. Typically these target properties for turn-around will not be “creme puffs”. Homes that have upgrades, have minimal maintenance issues and are showcased to sell are not going out a bargain basement prices.
Simi Valley Home Sellers – Gary Keller Author of Shift say this is a “Goodbye Market”
ABC’s Good Moring America produced this piece to help Homes Sellers better understand the challenges selling a home in this market. The key message coming out of this, is that homes not only need to be priced right, but they need to staged and readied for market.
Gary Keller Founder of Keller Williams Realty. HQ operating out of Austin Texas with Locations in the United States and Canada. Despite the recent challenges to the real estate market Keller Williams Realty is Debt Free and in 2009 profit shared over 32 million dollars with it’s agents. Keller Williams quietly sites behind RE/MAX., Coldwell Banker and Century 21 in agent counts presently. All three competitors lost agents in 2009 while Keller William Gained agents. If the current trend continues at the same rates then by the end of 2010 Keller Williams surpass all three companies.
Contingent Simi Valley Homes in Escrows out number Sales by 3 times, why?
As a Realtor, I have access to detailed information on all the Home Sales activity posted in the multiple listing service. My avocation of real estate blogging pushes me to dig deeper into the numbers so I can provide a better economic snapshot of how Simi Valley home sales and pricing is reacting to current buyer and seller sentiment.
Important numbers to get a barometrical view of the market include
the number of active homes for sale
the number of homes with the status of contingent
the number of homes pending
and of course the number of homes selling
The number of homes active for sale is a tricky number as the multiple listing service lumps the actives and the homes contingent together. However, looking closer at the contingent properties a remarkable number sticks out. Month after month after month through 2009 and continuing in 2010, contingent properties dwarf our monthly closing rates by as much a 3 times. Between the properties that are active and the amount of properties that close on average each month this massive number properties sitting contingent never catch up or diminish. Like Many Short Sales, they never close.
So what is the situation with all these contingent properties?
Let’s look at the numbers for today, February 25, 2010. Currently there are 171 Simi Valley single-family detached homes listed as contingent. Just to review, contingent means that an offer has been accepted. Of these 171 properties, 115 are short sales. This leaves 56 properties with the potential to close. As of today, 47 single-family detached homes have closed escrow. With just a couple of days left in the month, closings for Simi Valley single-family detached homes may dip below January’s count of 74. This is not alarming, as it follows a pretty predictable trend year-over-year in up and down markets. What is important to know out of all of this, is that this huge inventory of short sale escrows is a good indicator that a recovery is going to be a long and slow process.
Next time you hear that there are 350 or more single-family detached homes for sale in Simi Valley, you can lop off at least 40% of those homes as they are in short sale limbo. Our averages for active listings in Simi Valley on a weekly basis were averaging below 170 total single-family detached homes for sale up through November 2009. We’ve had a small bump in for the last couple months have been averaging in the 190’s.
I wanted to give a nod to Dean Ouellette over at Thompson Realty. Dean has been very good at collecting great articles on Real Estate and created the Top 10 Real Estate Posts of the day on his blog www.deansellsaz.com. This is a great resource to bookmark or subscribe via RSS feed and of course a great guy to call if you are moving to Arizona.
What you need to know about the City of Simi Valley Housing Element Update (Part I)
Where can the city allow development? Will the hills of Simi Valley be jeopardized? The city has been working hard to come up with a plan that works for all, however the city and the citizens are their own worst [...]
Simi Valley Home Sales Report YTD – January 31, 2010
Simi Valley home sales for the first month of 2010 trended back to average levels seen through 2009. While December 2009 showed the strongest sales for the year, my hunch was that many Short Sale lenders trying to close their books for the fiscal year increased [...]
Tuesday – I learned that both Lawyers and Chicago Title Insurance Companies had simplified their rates. I see this as a great move on the part of these two title companies. What they have done is made their short term rate now the standard rate. Previously, the short-term rate was a discounted rate homeowners would [...]
RESPA changes enacted January 16, 2010 will benefit Simi Valley home buyers and help them understand the costs of their financing on the new good faith estimate (GFE) and HUD-1 settlement statements.
When shopping for a loan, the mortgage broker must give a good faith estimate to the client that outlines the costs of the loan. [...]
In this year to date Simi Valley Home Sales Report, I am going to first cover what happened in December and then look at the year as a whole, with a prediction of how I see things shaping up for the 2010 Simi Valley real estate market. I am seeing similar activity in the West [...]
As a Simi Valley Home Buyer in this market you will be confronted by many homes for sale that are Short Sales. Before submitting an offer buyers should be concerned and careful about the process they are about to enter. The current market conditions for buyers has been difficult for many. Inventory levels have been [...]
Ted Mackel is a Real Estate Agent with Keller Williams Realty. He assists Buyers & Sellers in the San Fernando Valley, Simi Valley and East Ventura County.
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Answer by Ted Mackel: Sgold, I just listed a home in Simi Valley yesterday that had this exact same situation and it just is a big fat can of worms you really do not want to get into. Richard in Riverside is stating what is becoming the norm. http://homebuysblog.com/2009/11/09/what-is-a-short-sale-can-i-short-sell-my-home/ […]
Answer by Ted Mackel: I am going to have to back up Bonnie here on this one. FHA financing matters a great deal to sellers. The FHA appraisal is far more rigorous than a conventional loan appraisal. The FHA appraisal process can generate a list of repairs large enough to kill an escrow. The facts support this assertion as well. When you look at the closings […]
Answer by Ted Mackel: Kimberly, Here are your issues. If you are getting a loan. The appraiser will need to get in the house. The Seller can post a 24 hour notice (for inspection) and drill the locks if the tenant is uncooperative. This will require scheduling the appraiser and a locksmith all at the same time and if the tenant still refuses or blocks entry, […]
Answer by Ted Mackel: Kimberly, This is probably the most exciting time to be in this business. The communication tools and channels I have at my disposal are endless. I owned a large business in Simi Valley in the 1990s and I had no way to reach my customers other than direct mail, the Newspaper and a prayer that I could get the Star to do an article on my […]
Answer by Ted Mackel: Kimbery, You can look up LLCs & Corporations on the California Secretary of State's website. It's public record. http://kepler.sos.ca.gov/cbs.aspx Unfortunately it does not give any more information about the entity's activities. Entity Name: CONEJO CAPITAL PARTNERS, LLC Entity Number: 200907810233 Date Filed: 03/09/2 […]
As a Realtor, I have access to detailed information on all the Home Sales activity posted in the multiple listing service. My avocation of real estate blogging pushes me to dig deeper into the numbers so I can provide a better economic snapshot of how Simi Valley home sales and pricing is reacting to current buyer and seller sentiment.
