Altos Research CEO Michael Simonsen on the Fox Business Network discussing the future of the US housing market

I met Mike a couple years ago at Real Estate Bar Camp.  Mike’s Company provides very robust Real Estate statistical data.  Altos Research.  Great to see him on Fox News.  Congratulations Mike!

The tables below breakdown the sales for single-family detached homes in Simi Valley’s notable Wood Ranch community.I’ve purposely not mixed the Wood Ranch condo-town home market with this data as the diversity and size, types of complex and amenities are a very broad range for attached homes -  skewing the averages.

The same pattern is seen in the Wood Ranch community as in others I have looked at in Simi Valley. In May of 2009 the market hit a low, which may prove to be our market bottom. As encouraging as that news is, it doesn’t mean that our struggling real estate market is in a full recovery.

A recent article from DSNews.com discusses how distressed properties will impact the market into 2012.

loss mitigation efforts like the Treasury’s Home Affordable Modification Program (HAMP) that are preventing another debilitating flood of foreclosures from hitting the market. Although HAMP and its private sector counterparts are likely simply delaying the inevitable and “prolonging the pain,” as Barclays analysts put it, such programs support a better outcome for the industry than one big market-shattering shock, they say. Barclays Lowers REO Invetory Estimate

The number of homes  with financing issues that will influence the market is still very large and will take a number of years to get through.  A quick glance at the public record reveals that  Simi Valley’s Wood Ranch community has approximately 54 properties that are in the process of foreclosure. Less than half that number has an auction date set for the property. Looking at Long Canyon as an example on one tract in Wood Ranch shows 9 properties in pre-foreclosure and 4 additional properties set with auction dates.

While the banks are much more cooperative with short sales and loan modifications compared to the last two years, these troubled homes and the ones that will be added to the list this year and next remain a negative influence on Simi Valley Wood Ranch home values.

Sales broken down by year with highs, lows averages and days on Market.

Thanks for reading Simi Valley’s Premiere Real Estate Blog!

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

Looking at the numbers for June 2010, Simi Valley home sales look promising. Once you look past the surface of the reported numbers, some concerns become apparent. The federal tax credit set up to entice first-time home buyers with $8000 and move up buyers with $6500, was conditioned that those buyers needed to have a home under contract by April 30th and close the escrow and no later than June 30, 2010.

These tax deadlines usually are trigger points to stimulate the market. However, if you look at the Simi Valley Home Sales charts that are posted below you can see that the sales volume over the course of the last four years has really not changed much. In fact an increase of only six additional Simi Valley homes sold between June 2009 and June 2010,which  shows that the tax incentive really was no incentive at all for Simi Valley Home Buyers.  My industry and the newspapers rushed to claim victory that the market is now recovering, but the sobering truth is that 2010 will most likely be named the year of the Short Sale.

So what does this mean if you are a potential home seller in Simi Valley or potential home buyer in Simi Valley?

For home sellers, you fit in one of several categories.

• A change in employment, whether this means a move/relocation, layoff or decrease in salary, this could force you in the position to have to sell your home.
• A move-up. Things are going okay in your life and you would like to buy a larger home.  If this is the case, even though the sale of your home may not fetch the price you believe you deserve,  the bigger homes you are looking at purchasing have probably suffered similar or larger decreases in value and will help you to move up.
• A move sideways. You’ve really like to have a pool but don’t want to go to the expense of having one installed in the home you already own. If this is the case, the cost to build your own pool could be much more than finding a similar home that already has a pool in it.
• Sellers that plan to be in Simi Valley for a long time and don’t have circumstances that really need to prompt a move at this time. Sit tight and enjoy your life, what happens over the course of next couple years will be more important those who have to sell at this time.

For home buyers here are a few concerns to consider.

• Making offers on short sale properties. The key to successful short sale purchase involves a few factors. First, as a buyer understanding that the value of the property is critically tied to what the sellers Lender’s a appraisal values come in at. Ultimately in a short sale, the seller’s Lender will approve or disapprove the sale of the home, based on how much money they will receive if they agree to take less than what is owed. The seller’s Lender will rely heavily on the current market value of the house supported by several appraisals and (BPOs) broker price opinions. Finding deep discounts on these properties are very, very difficult. Anyone who gives you the Cal Worthington and his dog Spot routine should be avoided. Second, the listing agent handling the short sale may not have the skill set to handle this complex transaction. Properties are listed far below market value, and/or have a listing agent does not equipped to deal with the complexities of the requests by the seller’s Lender, will only tie you up in a long-drawn-out escrow with little chance of success.
• Making offers on bank owned properties. Most of the banks who’ve taken the time to foreclose and then list their properties on the open market through the multiple listing service are looking to get current market value on these properties. Much like short sale lenders they have had several appraisals and several broker price opinions done on these properties they have a very good understanding as to the surrounding values compared to their property.

The bottom line is that interest rates are very favorable for those looking to purchase. and affordability is at it’s highest levels in 40 years. Appraisal value is tied very strongly to the final sales value of most homes and finally we still have a long way to go until the large volume of distressed properties are cycled through the market and lessen the impact on those home sellers who have equity in their homes.

The next time you see a lot of hype and cheer-leading over the Southern California real estate market, make sure to check in here at HomeBuysBlog.com, scroll down the right-hand column and look for the categories and under market updates you’ll be able to look at the charts and tables to see what the average sales volume and average sales prices for Simi Valley.

Thanks for reading Simi Valley’s Premiere Real Estate Blog!

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

Simi Valley’s Texas tract is one of the more popular areas north of the 118 freeway for home-buyers moving or relocating to Simi Valley. Typically comprised of older homes on larger lots with wide sweeping streets on a gentle sloping downhill, pricing has always been attractive to the largest segment of the market.

Texas tract single-family detached homes is made up of four different subdivisions. The Bellwoods, the Alpine’s, the Parklanes, and the New Monterey’s. The Belwoods and the Alpine’s were the first to tract built nearly 1960s. The shopping center located at the corner of Alamo and Tapo streets was anchored by a supermarket  (and if I remember correctly was an Alpha Beta at the time) that center is named The Belwood Center which now houses Fresh and Easy Markets and Yankee Doodles.

Below are some charts and tables of the sales data for Simi Valley’s Texas Tract beginning January 1, 2004 up through June 28, 2010. The average sales price in the area has dipped significantly below the 2004 averages and looks to be settling in the low $400,000 range. You may also notice that the volume has significantly slowed as well. The high number of foreclosed properties and short sales has added a negative impact on sales in the area.

While homeowners in the tract are patiently waiting for the recovery, those homebuyers looking to relocate into Simi Valley have an opportunity to find good value in one of Simi Valley’s most coveted tracts on the north east end of Simi Valley.

Sales broken down by year with highs, lows averages and days on Market.

Simi Valley detached home sales for May of 2010 essentially matched the results of May 2009. While May sales saw an increase in sales volume over the first four months of 2010, the expiration of the tax credit should have accounted for a higher sales volume. The federal tax credit deadline finishes on June 30 and Simi Valley sales closings better pick up before June 30 if anyone wants to claim the federal tax credit was a stimulus on the real estate market.

The same story continues month, after month, after month with sales under $500,000 dominating the market and the majority of those are under $400,000. All purchases are still dominated by 20% down conventional financing and combined with the all cash Buyers. FHA purchases are accounting on average for about 33% of the sales.

The average sale price of a Simi Valley detached home declined significantly in the first quarter of 2010 and has rebounded over April and May, however, looking at the improvement in average Simi Valley sales price over 2009; this is still significantly below 2008 average sale price levels.

The historically low interest rates are helping stabilize prices from any future significant declines.

Simi Valley homes for sale for the month of April 2010 had a slight uptick. The gain in average sales price and the slight gain in the total number of Simi Valley homes sold, is largely related to the federal tax credit that expired April 30. Effects from the federal tax credit will be  seen in the Home sales reported for May and June as part of the tax credit regulation required that Simi Valley home buyers have a property in escrow by April 30 but close their escrows by June 30.

Still looking at the charts below you can see that the action is in the lower end of the markets as this trend has continued over the last year.  Even-though the tax credits have given us a little positive momentum there is still quite a bit of softness in home pricing throughout Simi Valley. A property I sold in May, in the Simi Valley Oakridge Estates, dropped below 2003 prices. Another property I am working on in the Madera Hills Tract would’ve had higher offers last fall than what we’ve been seeing this last week.

What has become significant in the Simi Valley market is the number of short sales occurring. Most of the listing calls I’m getting at this point are coming from people who need to short sell their property. While I work with plenty of equity sellers, short sales create their own drag on the overall market.

This is a Quick Graph of the Volume of Simi Valley Home Sales by Month since 2003 for single family detached homes. If you follow the chart you can see that the May, June and July figures all stay pretty close over the last couple years beginning after 2007. The news such as papers and TV reports on a much larger regional scale which lump the sales data for very large areas into one report. If you’re planning to buy or sell a home in Simi Valley, you need to know what’s going on in Simi Valley in order to come up with a strong strategy. Please bookmark or subscribe to this blog so you can see what is going on locally in Simi Valley.

Thanks for reading Simi Valley’s Premiere Real Estate Blog!
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

Median Home Prices and Regional Reporting Misrepresents Local (Simi Valley) Market Conditions

To find the median home price, you take all the sales from highest to lowest and find the middle number. This approach to determining the current real estate market conditions is a waste of time and not reliable. The following chart below shows the volume of single-family detached home sales in Simi Valley for 2009. Notice that the bulk of the sales are taking place on the entry-level range of the market. Any months were sales creep up in the sub luxury and luxury markets and the median number gets skewed.

Another error in evaluating real estate market conditions is looking at regional data. Most traditional media sources get their information from sources like Dataquick. While Dataquick provides accurate regional data, the data is too broad for the current market conditions so we have to dig deeper and look locally or even hyper locally determine how the market is reacting. Current regional reporting is indicating price increases. This is a county wide report and when we look closer at just the home sales for Simi Valley a far different picture emerges.

Sales volume is dropped off since it’s high in December and Simi Valley’s average sales price has steadily declined over the last three months  erasing the games from the second half of the year. I have continually predicted a bumpy bottom and we are in that cycle now or should I say still.

If you look at the chart below, the last three years average sale prices for Simi Valley single-family detached homes show the importance of not lumping Simi Valley into a countywide report. If you are a Simi Valley home buyer or home seller, you need to know what the true market conditions are in order to plan properly.

Any Real recovery in the Simi Valley real estate market in Southern California overall is going to be tied to employment, affordability, interest rates and a depletion of the mega inventory of distressed loans still unresolved by the banking industry.

Thanks for reading Simi Valley’s Premiere Real Estate Blog!

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

Federal and California tax credits were created to lure home buyers into the market.  Simi Valley home buyers have a small window of opportunity to take advantage of both tax credits and double-dip the system. The federal first-time home buyer tax credit of $8000 is set to expire April 30. More specifically, home buyers qualify for this program will need to have a house under contract by April 30, 2010. They will need to have escrow close prior to June 30, 2010. At the same time, starting May 1, 2010  any escrows closing prior to June 30 will qualify for the California first-time home buyer tax credit of $10,000. While this credit is good through December 31st, 2010. The opportunity to double dip the system needs take place before June 30.

My main concern with these home buyer tax credit programs is that  Simi Valley home buyers (especially low down payment buyers) will rush to purchase a house and end up chasing  a tax credit cash for a clunker. Many of the properties for sale in Simi Valley currently are short sales and foreclosures. These properties typically have significant amounts of deferred maintenance and repair issues. Many times the repairs needed to restore these properties will far exceed any monies gained in tax credits. Keep in mind, at the California tax credit is spread out over three years and not given all at once.

My second concern is that these tax credits are really not creating any additional interest in the market. In fact  Simi Valley home sales volume and average home prices have dropped every month since  December 2009. I believe that the attractive affordability and low interest rates are driving the market currently and that sales would not suffer much if at all if the tax credits were to go away.

Those Simi Valley home buyers concerned that they may be missing a market can step back, relax and breathe a sigh of relief as the market is certainly near or at the bottom and will be for a long time before the market breaks through and start pushing out to a real recovery.

If you are a Simi Valley home buyer there is limited time to be able take  advantage of the double-dip but don’t get caught up in a frenzy and end up with a property  that will cost far more to fix up and what you will gain tax credit.

If you are a Simi Valley home seller, if your home is been on the market for a while and has not received any offers, now is the time to review your pricing strategies compared to other homes on the market that compete with your home and the homes that have sold in the last 120 days that compete with your home and  adjust your pricing to bring a buyer before April 30.

Thanks for reading Simi Valley’s Premiere Real Estate Blog!

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