Ventura
County’s Home Market For June
Just as we predicted in
January, home prices are rising quickly. We have been hoping for a larger
inventory of homes in order to help our buyers, but this is just not happening
in much of Ventura County. Across the USA,
home prices are still an average 25 percent lower than at the height of the
market in 2007/2008. This means there
are still a large number of people who are upside down on their home values and
cannot afford to put their homes on the market quite yet. As a result we simply
do not have enough homes to show our prospective home buyers.
Low inventory and strong
demand are fueling double digit price increases. In various California markets
we have seen greater than 20 percent price increases over the previous 12
months. According to MLS Listings Incorporated, home
prices rose 47 percent in Oakland and 45 percent in Santa Barbara from April’12
to April’13. The Santa Clara County – better known as Silicon Valley - has seen the median single family home price
rise to $795,000. This is near the all time peak of $850,000 set just before
the crash.
Ventura County,
especially East Ventura County has experienced very strong growth with a bit
more inventory coming to market than earlier this year. Once a home gets to market, our buyers have to
compete with multiple offers from other buyers and investors. Typically we have
a 2 or 3 day response time to find a new home, view it, and write an offer
before an offer is picked and accepted by the Sellers. Our Current market
resembles the 2006 market where people were writing offers on the hood of their
car after viewing a home.
Interest rates have now
begun to trend upwards and rose for the
third week in a row. Three weeks ago, they rose from 3.42 to 3.51 for a 30 year
fixed. Then the rate went to 3.59 for the week ending May 23rd. We don’t see
any near term trend changes here. Home prices are going up and that is
inflationary by itself, but our national economy is also improving. A few more
jobs and an improving stock market are also contributing to housing demand.
Just as an aside, your
family credit history has a huge impact on your ability to get a home loan.
Most people don’t spend enough time reviewing their records for mistakes or for
possible identity theft issues. Credit accuracy is a huge concern, and while better
than a few years ago, Buyers often find discrepancies on their reports which
need to be corrected before the loan process begins. You won’t have time to do
this once an offer is on the table competing for the Sellers approval.
The only Federally Sanctioned
free credit reporting website is www.AnnualCreditReport.com . Here you can get a
free copy of your report from each of the three major credit reporting agencies
each year. According to FindLaw
A Thomson Reuters Business www.FindLaw.com -
22 percent of Americans
have never even seen their credit report!
23 percent of 1,000 Americans surveyed said they have had a problem with
their credit report – Including incorrect or outdated credit history or
incorrect personal information. There were also problems reported with identity
theft, and information mixed up with another consumers file!
Do not overreach
yourself to purchase your home. If you are pre-approved for $400,000, don’t just
look at $400,000 homes! If you are
competing for a home, you must expect the winning offer will often be at or
above the asking price. Your lender will not loan for more than the appraised
value of a home. If you are tapped out at $400,000 and the appraised value came
in at $390,000 for the home in our example above, you must make up the $10,000
difference between the appraised value and your winning offer with cash.
Many times in our market
the winning offer is above list price and made by an individual who is paying
cash anyway.Yes, you can negotiate the difference with the Seller, but the
Seller usually just accepts the next best offer. My point is, don’t put
yourself in a position where you cannot afford to be the winning offer. Find a
home for less.
Find a home for less.
Lower your immediate expectations and consider a less expensive home. Find a
home priced low enough that your cash reserves cover the downpayment/good faith
deposit, closing costs, home inspection and
a little more for you to beat the competition. If you can do all that and be
happy with your home of choice, you greatly increase your chances of
successfully competing in this Seller’s market. Whatever home you find in
Ventura County today will probably be selling for 10 to 20 percent more in within
the next six months to a year.
So what does all this
mean if you want to buy a home in Ventura County? Buyers must do more
preparation when they are ready to go shopping. Check your credit history, get
pre-approved with your lender for an amount that will allow you to subsist,
should you be successful with your offer.
Prepare yourself emotionally and financially. Don’t be greedy – be smart.
You can win.
Mark Thorngren
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