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.

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.

Simi Valley Home Sales Report January 2101

Simi Valley Home Sales Report YTD 2009

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 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

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

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 San Fernando Valley and East Ventura County areas is this is where I conduct 90% of my real estate activity. Also, it is important for you to understand that one of my duties is to provide broker price opinions for several banks. I regularly prepare half a dozen of these price opinions every week covering mostly West Hills, Woodland Hills, Canoga Park, Chatsworth, Granada Hills, Northridge, Tarzana, Winnetka, Calabasas,  Simi Valley, Thousand Oaks &  Moorpark.   As an active agent listing,  selling and providing price opinions in these areas, I get a very good look  at real estate trends.

For December 2009 we had a nice increase in closings. A total of 98 single-family detached homes sold in Simi Valley for December. Compare that to the 66 homes that sold in December of 2008 and things are looking somewhat better. Taken against the rest of the year as a whole December is our highest closing month followed by May 2009.  Looking at the averages  over the last couple of years, in 2006 we had an average of 100 single-family detached houses close escrow each month, followed by 68 per month in 2007, 78 per month in 2008 and 80 per month in 2009. Low inventory levels and low interest rates have artificially kept the market moving, however these are fragile conditions for the market and  if inventory levels rapidly grow or interest rates move up over 6% ,the market will slow.

Looking closer at the single-family detached sales in December of 2009, short sales and bank owned properties did not dominate like they have in prior months. In fact, these distressed sales only accounted for 38% of December’s closings. Additionally, 56% of those closings were purchased with conventional loans (20% or more down payments),  12% with all cash and 32% using the low down payment vehicle, FHA.

The  attached homes (Condos and Townhomes)  had a total of 26 closings for December 2009.   Similarly, only 34% were distressed sales. They broke down as, 39% using conventional financing, 19% using all cash  and 42% were FHA.

This large number of closings for December is unusual and bucks  the trend of declining activity during the holiday season. This declining activity typically has not been influenced by good markets or bad markets, but in this case factors like the tax credit and distressed sellers trying to close out their books for year end probably helped the increase in closings.

The  average sales price activity is interesting. The chart below takes the average sales price for single-family detached homes sold in  Simi Valley for each month in 2008 and 2009. A average price low and stabilization is showing in 2009 with an increase for December. I believe prices will remain relatively stable as the low inventory and low interest rates are two of the main factors keeping buyers and investors interested in California real estate. While this chart is very encouraging, remember that this spans all price ranges from mansions to very the entry-level homes. When looking at sales by price range, December saw higher percentage of homes over 900,000 sell as compared to prior months. This dramatically drove the average sales price over $500,000.

Click on the chart to expand to a larger size for easier viewing

So what does this all mean for  Simi Valley and Southern California home sales in 2010? In my opinion we should expect to see some favorable activity up through April 30, as this is the drop dead date to get a home into escrow in order to qualify for the federal tax credit. Once this tax credit goes away, it will be interesting to see if the first time buyers with low down payments back away from the market. That $8000 credit has been very enticing for those with little reserves or savings.

As long as investors can continue to pick up properties at auction at below market prices, that segment of the market should remain the same. So I predict the real estate market to be very similar to 2009 with  caution over interest rates, employment, inflation, and lending requirements.  Any expectation that the market is in recovery at this point is premature. Our State and Federal economy has a long way to go.  From the mid 1990’s through 2006 our economy was based of people using the equity in their homes to extended their spending habits, banks lowered their requirements for home loans and the drop in interest rates gave people the mis-understanding that real estate, investments and business grow at unchecked double digit rates. While our Government , Major Media Outlets and Wall Street live in denial over growth rates,  everyone will suffer through a drawn out recovery that will see it’s fair share of ups and downs.

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 Home Sales have been moving along at a similar pace and not much has changed. Inventory is still extremely low. There really is not much new to report in that the Tax Credits, low interest rates and low inventory are producing false positives for the news media to feed off.

Simi Valley Single-Family Detached activity up through November 30, 2009 was as follows:

• Total Detached Homes Sold = 80
• Average Sale Price = $460,636
• Average Market Time = 81 days

Of these sold properties – 11 were short sales and 18 were foreclosures. The remaining 51 were non-distressed sales.

New listings  coming on the market have already have slowed considerably as seller wait till after the holidays to make a decision whether to list or stay put.

Simi Valley Town Homes & Condominiums activity up through November 30, 2009 was as follows:

• Total Attached Homes Sold =15
• Average Sale Price = $278,514
• Average Market Time = 95 days

Of these attached properties sold, 4 homes were short sales and 5 homes were foreclosures. The remaining 6 homes were non-distressed sales.

Up through February has been typically slow for the Simi Valley  Real Estate market and this year should follow pace as it has over the last 10 years.  Any increase in inventory and buyer activity is welcome.

Factors that will continue to heavily influence this market are:

• LOW INVENTORY
• LOW INTEREST RATES
• FEDERAL & STATE TAX CREDITS

Why I believe the market cannot sustain any serious increase in pricing:

• Monthly Payments
• Lending requirements

Since I have not talked much about the last two items let look at how these will seriously affect the market over the next few years.

Monthly Payments - Buyers today will buy in their monthly payment comfort zone.  If $2,200 per month is the budget for a buyer, then the ultimate purchase price is tied to interest rates.  If the rates go down or stay low then the buyer can afford a larger purchase price, if the rates go up then the buyer will have to change their expectations in the home they plan to purchase or wait to see if the selling prices soften and lower to their affordable payment range.

Lending Requirements – Since the liars loans are a thing of the past, buyers will need to prove income and their ability to repay.  No longer will buyers be able to qualify so high above their real purchasing level, that they will artificially  drive pricing up.

The value increases in homes will be tied to what Buyers can afford spend on their monthly payment, in which the bank will no longer turn a blind eye to income.

What we need to help move this stalemate along is employment which in turn means that government will have to create a climate in California to keep business from moving outside the state. The uncertainty of employment is a big key to our problems and one that needs attention.

Updates from Prior Months can be found:

Market Updates

Simi Valley California home sales were down in October 2009. This is very interesting in that the market has been pushed in a positive direction by the first-time home buyers tax credit. In  September and October buyers knew that the tax credit was scheduled to expire on November 30, this should have reflected in an increase in sales. So far, November sales of single-family detached homes will be stronger than October. Looking closer at these November sales, the majority are in the entry-level price range making this increased activity for November closely tied to the tax credit.

With the extension of the tax credit moved to April 30, 2010, activity should remain brisk as buyers try to take advantage one final time.

Key factors including the affordability, low interest rates, and low inventory are keeping first-time buyers and the investor market very interested in home purchases. While the economy struggles both nationally, statewide and regionally; home buyers and home sellers should be aware that any recovery will most likely be drawn out over a course of years and fairly bumpy from here on out.

What this means for Simi Valley home sellers is that equity recovery is probably not around the corner, but the low inventory levels are helping sellers remain with a slightly stronger negotiating position over the buyers.

What this means for Simi Valley home buyers is that this high level of affordability will continue to create competition for the low supply of inventory.

You’ll notice below that I’m changing the format of my standard monthly market update for Simi Valley home sales. While the averages from the multiple listing service are interesting, if you’ve seen the charting I have posted over the last year, those averages are skewed as the lower end of the market is behaving much differently than the upper end.

Simi Valley single-family detached activity up through October 31, 2009 was as follows:

• Total  Detached Homes Sold = 60
• Average Sale Price = $460,845
• Average Market Time = 82 days

Of these sold properties  – 11 were short sales and 12 were foreclosures. The remaining 38 were non-distressed sales.

• Total  Detached Homes Active For Sale = 183

Of these active properties, 25 were short sales and 11 were foreclosures. The remaining 147 were non-distressed sales and an additional 270 homes were in escrow, with 173 of those Detached homes as short sales and 33 foreclosures.

An evident monthly trend is the extremely high ratio of  detached homes in escrow compared to available inventory and actual closed sales. This further points to the difficulty sellers are having with short sales. To understand why there is such a high failure rate on short sales  please see my article: What Is a Short Sale And Can I Short Sell My House

Simi Valley Town Homes & Condominiums are reacting better and this trend is most likely tied to the low interest rates, affordability  and the first-time home buyer tax credit.

• Total Attached Homes Sold = 25
• Average Sale Price = $277,907
• Average Market Time = 93 days

Of these attached properties sold, 6 homes were short sales and 4 homes were foreclosures. The remaining 15 homes were non-distressed sales.

• Total Attached Homes Active For Sale = 50

Of these Attached Active Properties, 15 were short sales and 2 were foreclosures. The remaining 33 were non-distressed sales and an additional 133  Attached Simi Valley homes in escrow with 63 as short sales and 12 as foreclosures.

Both in the attached and detached Simi Valley housing sectors these high numbers of short sales are very important to track. Month after month after month, large numbers of homes in escrow have been dominated by short sellers. An average of 80 single-family detached homes are closing escrow each month and 18 attached homes closing.  The large volume of nonperforming loans and bad assets are not dominating the low closing rates and seeing that less than 50% of the monthly sales are distressed properties, the low success rate in purging the market of the short sales, will keep any recovery slow.

For more information please see:

• Simi Valley Market Reports
• September 2009 Market Report
• August 2009 Market Report
• 2008 Year End Market Report
• Inconsistent Housing Market News

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

CLICK to ENLARGE this Chart

Simi Valley Housing Market Update YTD September 30, 2009

Simi Valley Home Sales are following the typical pattern we’ve seen over the last several months. Home sales are still below prior year levels and the impact of the first-time home buyer tax credit, historically low inventory, historically low interest rates continue to drive the entry-level end of housing. I posted a colorful chart which shows the bulk of the sales still are under 500,000.  What has been surprising is, as I went back over June, July and August there were additional closings that wee reported late which move those numbers up.  We’re still averaging about 80 sales a month for 2009 but with the new information the summer months were more stable than indicated prior to the late reporting.

If you are a Simi Valley home buyer the market still poses obstacles for those looking to purchase homes under $500,000. We are seeing competition for these homes in the form of large down payments and multiple buyers.

In reviewing the Simi Valley home sales from January 2009 through September 2009, approximately 65% of all homes sold in Simi Valley were purchased with conventional financing, another 10% with all cash offers.  This leaves approximately 25% of the sales using VA or FHA low down payment financing.   What this means for future home buyers is that your competition will not only be the low inventory, it will be other buyers with higher down payments. While an FHA or VA loan can bring the same offer price to a seller, sellers tend to feel more comfortable with higher down payment conventional loans than their FHA or VA counterparts. Also sellers who have homes with any deferred maintenance could  obstacles for FHA or VA financing over those maintenance items.

If you are a home seller to low inventory, low interest rates and the tax credit has definitely created interested buyers. If your home is below $500,000 to low inventory is created fewer competing homes for potential buyers to view. What is interesting about this market is that if your home is over $500,000 low inventory becomes less and less a factor as the price of your home movies up. In fact earlier charts have posted show inventory surpluses in the homes that are in the 700,000 $1 million range.

Part of my day involves completing Broker Price Opinions for several area banks. A  “BPO” is requested by banks trying to value distressed properties on their asset sheets. My task for the bank is to evaluate the property they have given me by locating closings and listings in the area that will give the bank an idea of the value of the subject property. I’m completing BPO’s for Simi Valley, Moorpark, Thousand Oaks, Westlake, Agoura, Hidden Hills, Calabasas, Woodland Hills, West Hills, Chatsworth, Tarzana, Canoga Park, Winnetka, Northridge, Porter Ranch, Reseda and Encino. I have completed close to 200 in the last 12 months.

This look into the values of properties and surrounding areas shows interesting trends in the general market from entry level to high end. The trends I have been reporting on in Simi Valley are seen in these other areas.

A number of issues remain unresolved for the market from here going out, there is discussion in Washington DC to extend the first-time buyer’s tax credit and also open the tax credit to existing homeowners however this has not been voted on or finalized by the House or Senate. Any hikes in interest rates over 6% or higher will impact buyer payments as well. There are still record amount of loans in trouble, foreclosed properties and the unemployment levels will have lingering effects on the market over the next couple of years.

There are big advantages in purchasing a home in this market if the purchase is not an impulse buy. Affordability is at the highest levels in a very long time combined with low interest rates, Simi Valley home buyers have a great opportunity to make a smart buy.

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 Housing Market Update YTD August 31, 2009

Simi Valley Home Sales through August 31, 2009 continue with similar trending patterns as June, July and August are following our typical seasonal patterns of lower volumes as we head in to the fourth quarter.  Simi Valley Single Family detached homes peaked in May at 92 closings and pulled back to 80 a month for June, July and August.  This is 18 units fewer than in 2008 for June and July; 7 fewer than August 2008.  While low interest rates, historically low inventory and the $8000.00 federal tax credit for first time buyers continues to drive the lower end of the market,  the recovery is going to be protracted and drawn out.  Any substantial increase in interest rates, available inventory or pricing could put the brakes on an already struggling Simi Valley housing market.

Simi Valley Housing Market Update YTD July 31, 2009

The Simi Valley housing market has not been boring lately.  Extremely low inventories, Super Low interest rates and the $8,000.00 Federal Tax Credit which expires December 1st have buyers whipped up into a frenzy competing for very few homes for sale.  This situation has stabilized the lower end of the market.  The middle section of the market has seen some side affects as listings in the middle price range, that are well maintained and in good locations, are snapped up fast.  however the middle and upper sections of Simi Valley home pricing still has a fair amount of negotiations going on, where the lower end of the market is in the middle of a bidding war.

We seen this all before in 2004-2005 and those buyers loosing their heads just for a chance at a $8,000.00 tax credit are going to wake up with a similar hang over as the home buyers did from the 2004-2005 market.  When the dust settles and inventory is more balanced,  there will be many buyers of this tight market that are going to realize they bought homes with serious deferred maintenance. This oversight is probably going to be a larger cost and job to tackle than they first realized erasing the benefit of the tax credit.

The fact is that as prices move up and buyers get squeezed out again, the next group of buyers will revolt.  We should see a pretty volatile up and down market for the next few years out, as the banks continue to sell off their bad assets and under performing loans.
Below is the activity for July. We can see a similar trend in that fewer homes sold in July than June and fewer homes sold in June than in May.    We have a tremendous amount of homes in escrow, but more than two thirds are  Short Sales and while more short sales are starting to close escrow there is still a very large balance that never close.

Currently there are 256 single family detached homes in Simi Valley that are in escrow.  165 of those homes are Short Sales, only 32 are foreclosures.  With a constant closing rate under 100 detached Simi Valley homes each month and similar escrow counts over the last few months, the fragility of the market is oh so obvious.  We have another wave of Adjustable Rate Mortgage Loans coming due in 2010 and 2011 that I discussed last fall in this post  Adjustable Mortgage Reset Schedule

If you are a buyer and are worried you are going to miss the $8,000 tax credit, all I can say is don’t make an impulse buy now because the $8,000 you get as a tax credit may be far out weighed by a house that needs a ton of work.  Knowing that with 256 homes in escrow and only approximately 80 will close in August,  that means that 176 will not close and those 176 buyers will be pressed another month closer to the December 1st Tax credit deadline. I can see bad buying decisions multiply as we near the deadline.

How does this affect Sellers? Less competition means that you can sell your home quicker and negotiate less if you are below the $500,000 price range.  If your home is not a creme puff; then now is the time to consider selling your home as the lack of competing listings will take some pressure off your home being in showcase condition.  I need to emphasize “some” pressure.  If your your home is a kin to one of Cinderella’s step sisters that needs to be dressed up for the ball then consider consulting with a Home Stager; the cost is far lower than remodeling and can really make the difference on that first impression.

False Recovery? How Fragile is the Simi Valley Real Estate Market

This is a chart I whipped up last year trying to illustrate what a mortgage interest rate does to the real estate market when it goes over 6%.  I might have posted it before, but it really needs another look at with our current market conditions. Why this chart becomes even more important now is that the current market conditions are a false positive on recovery for the following unsustainable reasons:

1. Low interest rates (under 6%). Rates can’t stay here below 6% forever
2. Historically Low Inventory. Not enought supply to meet demand.  As inventory levels increase buyers have more choices.
3. Federal Tax Credits. $8,000 tax credt for 1st time buyers expires December 1st
4. Unemployment.  Double didgit unemployement still has a long way to go before recovering
5. Average monthly payments can no longer be disguised lower with exotic financing to help drive up sales prices
6. Renter Revolt – As soon as the prices move up enough to price renters out of the entry level markets sales will slow again.

If you are in the market to buy a home in Simi Valley, the frustration factor is getting to everyone, you are not alone.  Only a good increase in inventory can help cool this market down.  I pray for inventory for my buyers.

If you are a seller and cannot wait a few years before selling, this is the time to make a move as the low inventory creates less competition and the likelihood that you can move you home quickly if priced aggressively and made ready to show with a home stager or staged yourself.

If you would like to talk real estate in an open relaxed environment; follow me on Twitter @RealtorTed and watch for my updates as I usually go to Panera Bakery in Simi Valley one night a week and hang out for a few hours having coffee with local people talking about Real Estate, things around the community, computers etc.  I hope to see you there!