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 the sales totals.

The new trend appearing in all this is, fewer and fewer bank owned properties showing up on the open market. In  January a total of 74 single-family detached Simi Valley homes sold. They broke down as follows:

• 45 properties were non-distressed sales (60%)
• 17 properties were short sales (23%)
• 12 properties were bank owned (17%)

These properties were primarily financed with conventional loans (20% down).   25% of the properties were financed with FHA and we even saw a few VA’s.   Cash offers rounded out about 11% of all the sales.

In December we saw a big jump in average sales price which was due to two factors; And the first being a larger volume of total sales and the second factor  was the increase in the number of closings over $800,000.

Another  number to look at is the ratio between the original listing price and the final sales price. In the entry-level price range for single-family homes up to 400,000 homes sold for approximately 4.2% below the original list price. In the mid-level price range for single-family homes between 400,000 and 700,000, homes sold for approximately 3% below the original list price. In the upper level price range for single-family homes over $700,000, homes sold for approximately 7.6% below the original list price. I like to break out these ranges because sometimes an average of all will skew what’s really happening.

The  Simi Valley condominium/ townhouse market showed 19 properties sold for January.  They broke down as follows:

• 3 properties were non-distressed sales (16%)
• 13 properties were short sales (68%)
• 3 properties were bank owned (16%)

Dissecting condominium and town home sales has its own set of challenges. As these are more entry-level properties in the likely buyers with low down payments needing FHA or VA assistance, some of the HOA’s  are not approved for these types of financing vehicles and when there’s fewer financing options, prices are impacted negatively. If you own a town home or condo in Simi Valley, please give me a call and I can check to see if your HOA is  FHA and VA approved.

Significant factors that will impact the short-term real estate market in Simi Valley are the federal tax credit, interest rates, the economy, inventory levels and employment. The deadline to identify a purchase for the federal tax credit expires April 30. This means a home buyer who would like to take advantage of this tax credit must have a property in escrow by April 30 and close that escrow prior to June 30, 2010.

Inflation, interest rates, any increases in on employment will impact buyers negatively, as long as government and the banking system can hold some of this in check, than the current market activity will most likely continue.

The housing market cycle in Simi Valley follows a predictable trend.  Sales volume slow and new listings volume decrease between Halloween and just after the Super Bowl. However, inventory levels have increased somewhat over last year’s averages and sales volumes have picked up a little, these are not reliable figures to predict a whole year. Considering affordability at the recent highs we have been experiencing, significant declines in pricing do not seem likely.

Non-investor buyer’s considering a purchase at this time should still plan on a 10 year hold position the minimum,  while investors  can pick up bargains through purchases at the Trustee sales, Auctions and other Pre open market venues..  Quite a few of the homes scheduled for sale have been regularly postponed, but some deals can still be found.

As a recap summary. Affordability is at the best levels it has been at in 40 years.  The general public still refuses to understand that normal appreciation in housing historically is 4%-6% annually.  Any unrealistic expectations that home appreciation needs to go above the historical norms will continue the prolonged recovery.  The delicate balance of interest rates, tax credits and inventory levels could create another set back if upset, however looking at the activity over the last year and who the buyers are, that set back will probably be minor compared to what we saw in 2007-2008.

December 2009 Report

November 2009 Report

October 2009 Report

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Author – Ted Mackel Simi Valley Real Estate Agent – Keller Williams Realty

Ted Mackel is a top producer at Keller Williams Realty Simi Valley,

specializing in Simi Valley Real Estate

(805) 432-7705