Camarillo
saw a gradual decline in home inventory from
239 homes in Oct to 226 homes in Nov, and finally falling to 192 homes for Dec.
The market is still stronger than a year ago when we finished 2013 with just
164 homes in our Dec inventory. Most of the decline in inventory was in SFD
(single family detached) homes while condo/townhome inventory remained fairly
stable.
The number of homes
which go under contract and into escrow during each month is a fairly strong
indicator of the number of homes which will close escrow during the succeeding
month. In other words, most of the homes which go into escrow this month become
closed sales by the end of next month. This is why monthly sales numbers are a
good indicator of the previous month’s sales market. But sometimes we
are fooled.
Sept had 78 homes go
into escrow, Oct had 85, and Nov had 83. So, we expected to see somewhere close
to 78 homes close in Oct and indeed 74 homes did close escrow. We had 85 homes
go to escrow in Oct so we expected closed sales of about 85 homes in Nov. That
didn’t happen.
We had 53 homes
close escrow in Nov! This was 32 homes fewer than we would have expected. So
what happened to the 32 homes? Some probably dropped out of escrow (which is
more common than most people know) and some took longer to close (maybe due to
the holidays) and reflect into the next month’s sales numbers. So the 83 homes
that went into escrow in Nov morphed into 75 homes sold in Dec. which equaled
Oct sales numbers! This happened despite the fact that Dec had the lowest home
inventory of the 4th quarter.
Obviously, home
inventory is not a good predictor of monthly sales or monthly buyer demand in a
transitional market like ours. We are still in a fairly strong seller’s market
but nowhere near as strong as the market in the Spring of 2013 when prices and
interest rates were much lower than today. If buyer demand remains constant,
then home inventory will often help drive home prices. Smaller inventory
increases competition among buyers and helps to raise home prices. Larger
inventory increases competition among sellers and tends to lower home sales
prices. In our transitional market, anything can happen.
Most of the
foreclosures and short sales are gone. Foreclosures were 19.7% of our state
market in 2011 and just 2.5% of our market in 2014. Short sales were also 20.2%
of our state market in 2011 and just 3.6% of our market today. So total distressed
property sales have dropped from 40% of our market to roughly 6% today as shown
in CAR’s (California Association of Realtors) “2014 Annual Housing Market
Survey”. Many investors have left our market since home prices and loan
interest rates have risen steeply during that same time frame.
Prices in Camarillo
have risen close to 26% by my calculations since Jan of 2013. There was roughly
a 20% increase in 2013 and about 6% in 2014. The Median home list price for Nov
was $665,000 as reported by our local VCCAR realtor board in the “Ventura
County Market Report for Nov 2014”. This is a staggering 25% increase in price
from the previous month. I believe this reflects more on a smaller number of higher
priced homes which sold rather than on the actual overall market. We can check
this next month. The median Sept sales price in Camarillo was $540,000 which
compares more closely with the Ventura County Nov median home price of $512,000
for a SFD and $330,000 for a condo.
Less expensive distressed
home sales are almost gone, investors are leaving the home buyer market and
home prices have risen above what many first time home buyers can afford. As I
discussed in my 3rd quarter report – most new home developments in
Camarillo are beyond the reach of first time home buyers as well. According to
CAR, first time home buyers made up 50.8% of the market in California in 1995.
In 2014, first time home buyers made up just 30.5% of the market in California,
a decline of 20%. Student loan debt is also affecting our home sales. According
to the Federal Reserve Bank of New York, student loan debt has tripled over the
last 10 years with over 78% of students owing more than $10,000.
So who are buying
homes in Camarillo? Affluent home buyers appear to be the only group
comfortable with our market and indeed, we have seen a surge in their purchases
as our economy continues to improve. The major challenge we will have in
Camarillo is in the market for trade up homes which would normally be purchased
by folks who come from the first time home owner segment. As the first time
home owner segment continues to shrivel up, it will become an issue to trade up
home owners. According to CAR’s 2014 Market Survey: “This occurred in the late
1980s, when low affordability curbed first-time homeownership, which in the
early 1990s exacerbated the decline of the trade-up market in California.”
Sellers have seen
their homes appreciate to levels near the market prices we had at the peak in
2006. Most home owners are once again building equity, often refinancing their
homes or entertaining the possibility of selling their homes for a profit. They
are generally reluctant to accept low price offers from buyers. They can afford
to wait. People who chart the stock market will recognize this market pricing
as a resistance ceiling. At some point, buyer demand will recognize the new
home values and the volume of sales will markedly increase to match this
realization. Looking at our local trends, I think this will happen within the
next 2 years
I believe that home
prices will continue to rise at a modest rate in 2015, moderated by a gradually
increasing home inventory and by rising mortgage interest rates. In California,
the median household income of a first time home buyer is $80,000 … I’d guess that
is a bigger number in Ventura County. Better keep your kids’ bedroom available to
them when they graduate from school, because they probably won’t be buying
their first home in Camarillo.
Oxnard
The number of homes for sale have fallen
from 314 homes in September 2014 to 212 Homes in December 2014. This is
down from the June peak of 344 homes.
212 homes were listed Dec 2014 mostly
unchanged year over year from the 220 homes listed in Dec of 2013. The number
of monthly home listings has fallen from
117 homes in Sept to 57 homes in Dec. Total home sales have remained remarkably
consistent at 108 homes in Sept, spiking to 155 homes in Oct and dropping back
to 109 homes in both Nov and Dec.
The Nov median home price in Oxnard was $415,000, up
from $410,000 in Sept. Port Hueneme had a median sale price for Nov of $300,500
… the lowest in Ventura County.
Ventura
The
4th quarter saw a predictable fall in home inventory from 219 homes
in October to 145 homes in December up slightly from 136 homes listed in Dec
2013. So there has been a small growth in inventory. The number of homes coming
to market each month has trended downward from the third quarter with 91 homes
in July, to 85 homes in August, 76 homes in September and continuing down in
the 4th quarter all the way to 33 homes in Dec. Total sales numbers remained
remarkably constant at 79 for Sept, 81 for Oct, 80 for Nov and finally tapering
a bit to 70 sales in Dec – close to the 74 sales in Dec of 2013.
The November median price of a home in Ventura was
$471,500 down from $505,000 in September.
Santa
Paula and Fillmore have seen no appreciable increase in total home inventories during the 4th Quarter. Santa Paula listed 28 homes for Oct, 24 for
Nov and 24 again for Dec. Home sales also stayed flat with 12 homes selling in
Oct, 10 in Nov and 12 again in Dec. Year over year home sales remained nearly
unchanged with 10 homes selling in Dec of 2013.
The May median price of an existing single family
home in Santa Paula was $352,000, rising to $412,000 by Sept, and on to
$475,000 in Nov. This is a very steep upward
pricing trend. Fillmore had a median
home price of $336,000 last May, which rose to $354,500 by Sept, and continued
upward to $393,450 by Nov. Again, this is a very aggressive upward pricing
trend.
Moorpark
saw
inventory decrease from 102 homes in Oct to 84 homes in Nov, to 72 homes in Dec
. The number of homes going into escrow with accepted offers has remained
fairly constant with 44 homes in Oct, 41 homes in Nov, and a slight dip to 27
homes in Dec’14 which is very close to the 25 homes which came to market last
Dec’13. Total closed sales were 23 homes in Oct, 23 again in Nov, then a spike
to 43 homes in Dec… up from the 37 homes sold in Dec’13.
Median home price in Moorpark for May was
$620,000, up 19% from April! Then in
September the median price dropped back to $609,000, and fell precipitously to
$505,000 in Nov. I’m not sure what’s happening here. Possibly with such a small
number of home sales, which continued to decrease each month in the 4th
quarter, each sale has an effect on the averages out of proportion to what a
larger market might show.
Simi
Valley & Wood Ranch The home inventory has bounced back and forth
between 290 and 310 homes since August. In Dec’14 the inventory dropped to 231
homes - which is still a big improvement over the 158 homes available in
Dec’13. Sales stood at 114 homes in Oct and dropping slightly to 99 homes in
Nov and 97 in Dec’14 ... down slightly from the 107 homes which sold Dec’13.
The median price of an existing single family home
in Simi Valley was $489,000 for May, rose over the 3rd quarter to
$510,000 for September ... and fell back slightly to $482,500 in Nov.
Thousand
Oaks and Newbury Park have seen their total home inventory steadily
decline from 355 homes in July, to 344 homes in Aug, to 339 homes in Sept in
the 3rd quarter. The 4th
quarter continued down to 309 homes listed in Oct, 253 in Nov and finally 184
homes in Dec. That is a long slide down. Year over year home inventories are
very close for the month of December. Basically the 2014 home inventory boomed
during the first 3 quarters of 2014 and then gave back all the inventory
increases in the second half of the year. The number of home sales has remained
fairly stable at between 90 and 100 sales each month since Sept and finished
Dec’14 at 100 sales vs 99 sales in Dec’13. This appears to be a re-occurring
theme in most of the towns in Ventura County. Year over year home sales are
very close for the month of December.
Median May price for a home in TO was $619,450…
$717,500 in Sept… and back to $674,000 in Nov.
Median price for a home in Newbury Park was $629,500
in May… rose to $639,000 in Sept... and fell back to $585,000 in Nov. (ref: www.terradatum.com
)
Agoura
Hills & Oak
Park saw their total market
inventory build to a peak of 136 homes in July, taper back to 128 in August,
122 homes in Sept, spike to133 homes in Oct, then continue the slide down to
115 homes in Nov and 81 homes in Dec’14. This compares to 84 homes in Dec’13s
inventory.
Sales began at 25 homes sold for Jan and ratcheted
up to a high of 58 homes sold in July. Sales dipped back to 32 by Oct, 31 in
Nov and remained close at 33 homes sold in Dec’14 – nearly identical to the 32
homes sold in Dec’13.
Oak Park saw its’ median May home price rise to
$840,000, dropping to $685,000 in September, then rising once again to $874,000
in November.
Agoura Hills Saw it’s median home price drop year
over year from $837,500 in Sept’13 to $542,599 in Sept’14. (ref: www.ClarusMarketMetrics.com
) We have to remember that Oak Park and Agoura Hills are smaller markets than
most Conejo Valley communities, so it takes fewer home sales to skew the
numbers.
Westlake
Village & Lake Sherwood Total home inventories rose from just 96 homes
in Jan to a high of 175 homes in July, and 174 homes in Aug. Thereafter the
numbers dove from 165 homes listed in Sept, to 151 in Oct, 134 in Nov and 106
in Dec’14 – down from Dec’13s - 118 homes listed.
Monthly sales began at 25 in Jan and built to 58
homes sold in June. From then on it was a gradual downhill slide, with sales
bottoming in Dec’14 at 33 homes sold… compared to Dec’13s - 40 homes sold.
Median May price for a home in Westlake Village was
$1,081,500. By September the numbers had fallen to $830,000, and finished in
Nov at $1,200,000 for a median home price.
Summary
2014 was a roller coaster market that started weak
and built in both inventory and number
of sales until the middle of summer. Then the market gave back much of its’
gains.
This Decembers’ county- wide inventory is generally very
close to last Decembers’ inventory. However, almost every town studied showed a 4th
quarter decrease in total inventory and sales from the previous 3 quarters.
Prices rose more slowly in 2014, on average
about 6% in Ventura County. Though prices were soft in the 4th
quarter, I predict prices will strengthen again with the new year. Sellers have
reason to be optimistic about our market with home values in many areas building
upward towards levels we haven’t seen since 2006.
Home buyers are struggling with the new higher prices,
relatively low inventory, and lender requirements. On the plus side, inventory
will likely improve during the 1st quarter of 2015. Also, mortgage
rates fell in Nov’14 to about 4.0% …
down from 4.25% in Nov’13. They will probably not rise again until after
the first quarter if you believe the FED. The forecast is for rates to reach
somewhere around 4.5% before the end of the year.
All in all, I think the Ventura County market is
continuing to mend, with prices and inventory moving towards a more natural
balance. Future challenges include finding a way to encourage first time home
buyers to invest in our market. Or maybe to encourage developers to build homes
in a price range first time home buyers can afford.
Just the way I see it.
Mark
Thorngren
All data taken from
VCCAR MLS or as quoted. Display of MLS data is deemed reliable but is not
guaranteed accurate by the MLS. All opinions are those of the author.
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