Monday Morning Coffee Break: Ventura County Real Estate Doing’s For the Week Ending June 7, 2008

June 8th, 2008 Categories: Weekly Real Estate Activity In Ventura County

Sock it to me Charlie Brown.

This weeks economic events were startling with oil running up to $ 130 per barrel and the increase in unemployment.

A double whammy but the impact on Ventura County real estate through the past week was uneventful.

The unemployment number increase is due in part to the various educational institutions summer vacation. Part time instructors will seek unemployment during this period.

Other services related to real estate (escrow, title, mortgages, etc.) continue to lay people off because of slow sales.

During the previous week (ending June 7) home sales in the County grew slightly; the number of total listings remained the same. Days that sold properties were on the market stayed at 3 months but the variance between list and sales price of sold homes increased. Same stuff for the last several weeks.

The increase in the variance was due to a sale in the Santa Rosa Valley. Excluding that particular sale the variance remained at approximately 5%.

Overall Ventura County real estate appears to be strengthening and over the next few months, excluding any grand scale negative news, the market should continue to strengthen.

I would expect further basing to continue until the 4th quarter, 2008, maybe the first quarter of 2009, then the market will head upward. See historical comments below.

The chart below is a historical review of Ventura County real estate for the last 14 years.

With the current real estate cycle (which began around late 1992, early 1993), home prices peaked in the County around the year 2006 although the sales variance between years notes that the real estate decline started earlier, around the year 2005.

Assuming real estate works in cycles of 10 years, then the year 2003 would have been the peak year. This then suggests that the down cycle will end about the last quarter of 2008.

Based on the data below peak home (unit) sales per month occurred in the year 2003 with a small decrease in the year 2004. So it appears that the peak of the market occurred around the latter part of 2003, early 2004 and continued as a plateau until 2005.

There was a price blow off in 2005 and 2006.

Sales (units) began to decrease but prices continued rising, peaking in the year 2006. Now we are in the midst of a variance adjustment between list and sales price and this adjustment has to play itself out before one can say the downside has ended.

Sellers will continue to discount properties for the next several months. Some buyers will be able to take advantage of the correction but many will have difficulty getting mortgage loans. Banks are holding the hard line.

When the above data is analyzed it suggests that the bottom of this market will occur between the 3rd quarter of 2008, no later than the first quarter of 2009 and then the market will go up.

This gives some credence to the markets cycle……we are in the bottom of the cycle, strange things will occur and then UP!

The appreciation of Ventura County real estate can be viewed by looking at May 2008 Selected Cities Real Estate Appreciation Trends Report. It is expected that between the 1st quarter, 2009 and the 3rd quarter of 2012, Ventura County real estate will appreciate approximately 24%.

This appreciation factor is dependent on the overall national economy but based on current information this appears to be the projected real estate picture.

Your comments are welcomed.