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.

1. 2009 Monthly volume slightly picked up to an average or 80 closings per month over 2008′s 78 closings per month.
2. Conventional 20% down Buyers and All Cash Buyers in February controlled 74.5% of the purchases
3. Inventory has increased 15% over the last couple months.
4. The most active segment of the market continues to be in the under $500,000 purchase range.
5. 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.
6. Average Sales Price showed signs of stability last year and had a slight increase over the last 12 months.
7. Historically low interest rates help affordability and stabilize pricing.
8. 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.