The Simi Valley housing Market Report for October shows that sales volumes of single-family detached homes in Simi Valley California were strong for October 2014. Higher-priced homes still remain the reason for an increase in median home price and average sale price. There were eight properties that closed escrow in the $800,000 to $900,000 range these sales influence the median. Even though the number of homes sold for the month remains strong, buyer sentiment is still cautious as seen in the final sale prices that still trend 3% below the original asking price. Simi Valley appears to be in better shape than Los Angeles-area. In a recent report from Credit Suisse for the Los Angeles area a few of the more notable quotes were:
- Buyer traffic continues to run at muted levels, with our Index moving slightly lower to 22 in October from 24 in September. Most agents highlighted a shift in buyer sentiment. With prices starting to come down, buyers are hesitant to purchase, fearful prices will move lower. Also, some agents believe problems stem from lack of first-time buyers.
- “The recent move lower in rates (that has already partially reversed) did not drive incremental demand, though this could change over time if low rates persist.”
Lower interest rates seem to not be pushing buyers off the fence, the concern seems to be pricing. While Simi Valley has experienced an increase in pricing for 2014; sellers should be wary to expect the big gains as we saw in 2013 and from here on out any gains in pricing will be modest. Credit Suisse also collected the following comments from Los Angeles area real estate agents they surveyed:
- “Higher home prices are keeping buyers on the sidelines.”
- “Market is anemic. Sales are down, and inventory is building. People are afraid things will get worse.”
- “Values rose too fast to include first-time homebuyer. Rates are favorable, but this didn’t change buyers mindset.”
- “Clients are mostly concerned about housing prices moving downwards.”
One thing is clear, Simi Valley has always been a good value in any market as properties tend to be competitively lower than the Conejo Valley and West San Fernando Valley. This will in turn drive buyers to Simi Valley, however there is not much upward room for pricing to leapfrog. Pricing in Simi Valley is certainly near the upper side as we see homes sell below asking price. Simi Valley upper end luxury markets still remain attractive to buyers who are being priced out of other areas outside of Simi Valley.
Another interesting development was seen in the distressed market. There are still homes that are candidates for a short sell option. We’ve seen several of these homes listed prices significantly below market value. Their final sales price was as much as 125% of the original list price. This indicates that the lenders are scrutinizing these properties and not approving pricing below market value. If you believe your property is a candidate for short sale, it is important that you hire the right people to price your property right and not put yourself in jeopardy of losing your house to foreclosure over a gimmick technique by undervaluing the list price. I’m well experienced with short sale properties and work with a seasoned short sale negotiator to avoid all these issues. Call me today at (805) 432-7705 to discuss a short sale option for your property.
WHAT’S THE BOTTOM LINE?
- Buyers have not completely backed off the Simi Valley housing market. Activity is still good.
- Buyers perceive value in the Simi Valley housing market, but they will not overpay. Sellers should be prepared for negotiating.
- There are still some deals in the distressed property market, but don’t expect short sale lenders to give away the store when approving a short sale.
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