Zipping It Up….
May 4th, 2008 Categories: Weekly Real Estate Activity In Ventura County
Monday morning coffee break—-Ventura County Real Estate Doings for Week Ending May 3, 2008.
The overall Ventura County real estate market continues its basing. As noted in the chart below listings continue to decrease, sales are increasing, the variance between list price and sales price has normalize. Days on the market for sold homes is still high but this too is showing signs of decreasing.
I myself am getting more phone calls from potential buyers. Many sellers continue to draw the line in the sand and are not appealing to buyers negotiating needs. Sellers are content to keep their property until they get the value they perceive to have.
Buyers seeking to purchase properties for nothing and have the seller share escrow cost are now finding slim pickings. Sellers are willing to sit and wait for their price.
Foreclosures and bankruptcies are still high. The jaw boning to help many of these people was just that….jaw boning. Very few have been helped either because they started the process too late or their banks have decided not to support them in saving their property. This area is a no win for both sides.
A side bar on contracts. Real estate contracts generally are sold to a 3rd party and contracts do have meaning. If one defaults on a contract it is difficult in many situations (especially real estate) to undue or amend the contract unless the bank or lending institution has kept the contract as part of their portfolio.
Back to the market. People are beginning to stir and want to buy. But they are finding that banks are not very friendly. That appears to be a trend.
There are other direct and indirect factors that prevent the real estate market from getting legs. For example:
The Federal Reserve has taken giant steps to steady the markets. Banks and other lenders have not.
These money institutions are still reeling in shock over the over the sub-prime melt down. They have not only become a problem but they face other problems (which by default become consumer problems).
Banks are seeing auto loans defaults increasing. Also the Federal Reserve has now stepped in and is mandating that the credit card industry remove certain practices that have been detrimental to what the Reserve is doing and injuries to consumers. The Federal Reserve has not acted as it is now since the depression periods of the late 1920-1930’s. It is starting to wield a heavy ax. Attila the Hun in action.
Consumers are now zipping up their wallets and purses. The Federal Reserve sees this and understands the overall reasons.
Vital stables are injuring consumers and economies at all levels. It is expected that most food items will increase from 4-10% over the next several months.
Vital (to Californians at least) is the continued increase in fuel. Action on fuel will become a major concern only when gasoline reaches $ 5.00 per gallon or more. Then the political talk will come into play with meaningless actions adding to increase cost of transportation (with added fees).
Part of this fuel increase is due to the use of corn for ethanol. Not all…..the decreasing value of the dollar is a factor; transporting fuels has increased significantly; State mandates of fuel mixtures has certainly added to the cost; lack of drilling or using other natural resources because of environmental concerns is a culprit; institutional, science and private non-profit agenda’s have added to the cost (part of environmental concerns).
I read that Congress wants to review the regulations they sponsored regarding the use of ethanol (heaven help us). Many States are now beginning to voice concerns that ethanol is doing more damage not only to respective State economies but the pay off of consumer ethanol use isn’t supported and it appears that not enough testing was done to say that it would help the environment.
But the lag in real estate has impacted monies going to the States. Real estate is and has been the golden goose.
Another side bar. I do not recall of any test done that showed that ethanol would be of help to our environment. I have seen and read a lot of what people thought would happen but no valid testing.
We tend to do things more on faith and assumptions rather than facts. It is cheaper. That is what cost us. And facts are weaved in such a way that any statement made appears reliable and valuable. Just like history.
Back to real estate. Other steps being taken by the Federal Reserve and other international type reserves: support the dollar from further erosion. It appears that the 3 year upward run of the European Unit and other currencies has peaked and this will be help the dollar.
Internationally a number of governments are viewing ways of negating the influence of commodity investors on major food groups such as rice, corn and other stables.
When taken in total the above points are reasons for the real estate market not getting legs. It will take time to resolve some of the monetary problems and other issues will take a lot longer to solve. But as soon as the monetary issues get resolved (even partially) then real estate will really get legs.
For your real estate needs call me at 805-933-1385.
Your comments are welcomed.
