Simi Valley  single-family detached home sales for the month of March 2012, significantly out paced each March since 2007. The last time more than 100 single-family detached homes sold in the month of March for Simi Valley was in 2006 before the bubble burst.

Does this mean the market has recovered and happy days are here again? If you look back at last month’s report for February, the list to sell ratio tightened, inventory tightened and prices between January and February were hitting lows. It’s no surprise that the buyers reacted so swiftly in snapping up available properties.

Looking at the closings for Simi Valley home sales in March, several trends stick out.

• List to sell ratio is not tightening across all price ranges. In fact, in February, that ratio that tightened,  is now loosened up again. Notice that the homes under $300,000 sold for  as much as 8% on the average below the original listing price and in the $400,000 to $500,000 range, those homes sold for more than 5% below the original listing price.
•  Simi Valley Homes over $800,000 have almost next to no closings, with no homes between $900,000 and $1 million selling at all since the beginning of the new year.
•  Simi Valley homes under $400,000 continued to dominate monthly sales with over 50%  market share.

Inventory for single-family detached homes in Simi Valley is running close to two months, which should indicate a market advantage to the seller. However, buyers are still negotiating hard, the list to sell ratio is not tightening and erratic interest rates are not driving prices up.  Sellers are frustrated.

The Wells Fargo economic outlook for 2012 pointed out that S&P/CaseShiller Home Price Index has fallen every month since April 2011 and an additional 6% slide by the middle of 2012 can be expected, noting distressed transactions accounting for a significant proportion of sales.  Wells Fargo estimates (conservatively) that the “shadow inventory” could number 2 million homes. These are homes with payments past due 90 days or more.

For Simi Valley we are excited to see elevated numbers in closings.  Affordability is at all time highs.  It is great to see buyers get out and take advantage of extremely low interest rates. Landlords are accumulating more rental properties and many purchases will deliver decent cashflow.  We are starting to see property flippers run out of room and mostly because of the decline in pricing is catching those investors off guard.  April should continue at a brisk pace as this is a traditional time of year where buyers start to emerge from hibernation.  Low inventory should make this interesting, but I predict that any bid up frenzy will be short lived and buyers will retreat this time around when it starts to get out of hand.

This is the second year in a row that Simi Valley Home Sales Spiked in December.  Does this indicate a turn around in the Simi Valley housing Market?  Not necessarily and here are the reasons why.

• December 2007 only 42 Single Family detached homes close escrow in one of the lowest volume months for Simi Valley home sales.
• December 2008 only 66 Single Family detached homes close escrow in Simi Valley.
• December 2009 = 98, December 2010 = 94 and December 2011 = 104

What happened, why the increase?  Not only has interest rates and pricing helped bring more closed escrows, but additionally the distressed market pushes to close out files before year end in the Short Sale and Foreclosure sectors.  With almost a quarter of the single family detached homes selling in December at a price point below $300,000  and 52% of all the sales for December either a Short Sale or Bank owned property, it’s too early to celebrate a recovery.

Simi Valley has certainly hit a low and has been setting a repeating trend over the last 6 months, but any sign of movement up or out of the current situation is not showing.  Looking at the entry level single family Simi Valley homes sold in December 2011,  the longer days on market and the lower list to sale price ratios show that buyers are still looking for bargains.

The year is wrapping up.  Simi Valley Home Sales or should I say the number of homes sold for the year are improving.  Prices many not have improved, but the increase in volume is always good for housing.  The questions for Simi Valley are who is buying and what is selling?

The trend continues with homes under $450,000 commanding the largest sector selling in this market.  Approximately 33% of those homes are selling with low down payment or FHA financing with the balance going to Cash and conventional Financed buyers.  At Simi Valley open houses, I am running into many people looking to pick up their first rental property or additional rental properties.  Additionally, with many buyers looking to keep the home they are in as a rental and making the move up purchase on the second home.   These buyers are out in larger numbers because they understand money is cheap at the current interest rates and pricing is at it’s most aggressive point it has been at in the last few years with more single family detached Simi Valley homes selling below $300,000 than in any other year since the market collapsed.  If you follow the monthly postings here on my blog, you can see the trends in the activity.