Simi Valley Housing Sales Report January 2013

Home sales of single-family detached units in Simi Valley California for the month of January 2013 pulled back with only 85 sales for the month. While this is dramatically lower than the monthly average for 2012 and a 22% decline from December 2012; January and February over the last several years have typically behaved in a similar fashion.

 The median sales price for single-family detached homes remain the same at $400,000 compared to December. Over the last couple of months including January, homes selling in the $500,000-$700,000 price range are seeing increased activity. This increased activity in higher-priced homes is helping move the median price upward as 70% of all sales are below $500,000.

One of the factors that influence fewer sales for January and February is that many buyers stop looking for homes in November and don’t start their home search until after the new year. Additionally, many sellers wait until the new year rather than try and sell her home during the holidays.

Tight inventory, with less than 90 total properties for sale on any given day in Simi Valley, tight inventory has helped whittle down a pile of pending properties from the MLS. In just one year we’ve seen the backlog dropped from approximately 350 homes in a backup or pending status drop to 250 homes. The backlog got up to 400 properties or more some months in the past. Home buyers are less likely to pull out of an escrow knowing there are not many other homes to look at and knowing the battle with multiple offers will not be fun either.

Investor pressure is still strong. Most purchases still create cash flow opportunities for investors looking to add to their rental property portfolios. Typically California rental property as very very low cash flow margins and typically landlords in the past would see bigger rewards in increased value over the time they held the property. With interest rates hovering below 4%, this cheap money is very attractive to rental property investors.

I expect the market to remain much the same as it did in 2012. We will still see similar amounts of short sale properties enter the market. We will continue to see fewer foreclosures as lenders understand the advantages of selling the properties through the short sale process. As long as nothing radical as dramatic increases in interest rates, significant increases in inventory or increases in unemployment occur; buyers will continue to compete for the few homes that are for sale.