July 2013 Simi Valley Housing Update

Simi Valley home sales for July remained strong. The market for single-family detached homes continues to push to stay above 100 units sold per month. Strong sales in July were fueled by buyers in the first and second quarters stuck with a very low inventory and low interest rates. Units sold in July typically began escrow with an accepted offer in May or June. We should see some of this push start to ease as interest rates have moved up significantly and inventory has been increasing.

Even though sales for Simi Valley condominiums and town homes has rebounded, this market still is lagging in comparison to single-family detached homes in that most buyers were looking for properties without HOA’s when possible. With the increase in median pricing for single-family detached homes in Simi Valley, buyers in the market under $400,000 are now having to turn their attention towards the condominium/townhome market.

Closings in July continue to show advantage to the sellers of most properties. All price ranges except for the luxury market are selling at or just above list price, with the luxury market averaging about 2% below the original list price.

Average days on market is settling in under 60 days which is due to a couple of factors:

1. Distressed property inventory is almost nonexistent. If you look back at my sales report for Simi Valley home sales 18 months to 4 months ago you can see that short sales and foreclosures commanded 50% of the monthly sales, This no longer holds true.
2. The impact of the Internet. Just about every age demographic is now using smart mobile devices such as iPhones and Android along with tablets and laptops. Homebuyers young and old know to search the Internet for their next property. No longer is there reliance to wait for the weekend newspaper to view properties. Homebuyers have access to large amounts of data shortening decision time when it comes time to make a purchase.

While the last half of the year should continue to see sales volumes similar to the first half of 2013, price increases will begin to slow as affordability continues to narrow due to demand and rising interest rates.