Ventura County Real Estate Doing’s for Week Ending August 14, 2008
August 16th, 2008 Categories: Weekly Real Estate Activity In Ventura County
ZipRealty and Realtors.com have reported drops in home inventories throughout the United States. Major metropolitan areas such as Baltimore, Phoenix, Sacramento and a number of other areas have shown significant decreases.
Is this fall of home inventories good or bad?
It depends on why inventories are dropping. If the drop is due to sales it is good. If the inventory is dropping because sellers are retreating (expired listings) for better prices, it may or may not be good. It is too early to say. It will be dependent on when these properties return to the market place.
Some of the good news reported over the last week included Toll Brothers (a luxury home builder) Chief Executive Robert Toll stated that he sees a “growing pent-up demand” for homes as many buyers have delayed purchasing for the last three years.
Alan Greenspan, previous Federal Reserve chairman, this past week observed that he felt housing was beginning to stabilize.
Why is housing stabilization important?
“Stable home prices will clarify the level of equity in homes, the ultimate collateral support for much of the financial world’s mortgage backed securities” says Mr. Greenspan.
This site has been addressing the real estate turn around since the beginning of the year. Today I do not feel like a fish swimming against the current; I am swimming in the same direction as everyone else. What took you so long?
However the big “I” is starting to appear in newspapers and news medias rather regularly. “I”nflaltion appears to be taking hold. Why this surprises anyone is a surprise in itself. Food and fuel prices have been up aggressively for some time. Eventually the numbers had to support what most everyone else has known.
Overall it is expected that the Federal Reserve will keep inflation in check.
There has been some fall back in fuel prices. There have been reports that corn production will be higher (assuming Mother Nature doesn’t interfer with changing weather which it does frequently at this time of year).
Is the decrease in fuel and the increase in corn enough to dampened inflation? Coupled with the strengthening of the United States dollar the answer is yes.
Tony Kolton, President of Logical Information Machines, a provider of research to the world’s major energy trading companies has stated that oil will drop to $ 65 per barrel (it is currently around $ 113/barrel down from about $ 143/barrel). He states that speculators drove the price of oil up.
Side bar: If the United States doesn’t start drilling, oil will again accelerate upward and could reach $ 200 per barrel. That will pencil out to about $ 8-$ 10 a gallon at the pump. If that happens we will be drilling all over the place even in our own back yards.
Back to the subject:
Who are these speculators? For a start they include various union and non-union pension plans, various States pension and investment programs, individual commodity speculators, commodity funds, various colleges (Harvard, Stanford, USC, etc) trust programs. Take time and you can add to the list.
The consumer will eventually dictate what the market does. Spending over the last several months has been tied up in knots. Until the consumer feels confident in the market, spending will be limited.
Which is a quandary because humans (just because they are human) gravitate towards the negative.
There is evidence that driving (mileage) is down approximately 4% in California with the rest of the Country averaging about a 5% decrease in auto travel.
Some experts suggest that the decrease in consumer driving is partially responsible for the decrease in fuel prices. This certainly is an element but other factors prevail such as over supply, other world economies activities, a decrease in the speculative fervor that has been in place for months in the commodities and a cut back in spending by all people throughout the world.
Again until the consumer feels that the markets are secure and more positive they will hold back on purchasing. Expect to see some great sales as an incentive to part consumers from their money. Will it work? Probably yes.
Previously mentioned is a factor working in United States favor is that economies around the world are showing signs of stress. The US dollar has been increasing in value when compared to other currencies which bodes well for our economy.
The bottom line for all of this is good for real estate. Review the article “ http://www.venturacountyretalk.com/wp-admin/post.php?action=edit&post=391” and view the forecast for Ventura County real estate through the year 2022.
The market is getting extremely strong. Yes there will be a number of people who may think that I am hallucinating, but the market will be great. Those that waited to buy at the bottom have missed the train. See article: http://www.venturacountyretalk.com/2008/03/05/dont-buy-today-and-count-on-crying-tomorrow/).
California is suffering. Unemployment is up 7%+ (does not bode well); California is ranked number 5 as the highest tax state (New Jersey is #1; New York is #2. This is not good either. Business will seek lower rates in other States); in-land areas are still showing high foreclosures. The California political establishment cannot seem to get its act together.
Despite what is happening in the State overall, Ventura County is doing well. The County will be splashed with some of the negative activities going on state-wide but overall it will do well.
As previously expressed, real estate in the County will appreciate 7%+ this year; 17% over the next 24 months; and approximately 26%+ over the next 36 months. See article http://www.venturacountyretalk.com/2008/07/19/happy-days-are-here-again/ for various City forcast in and out of State.
The past weeks Ventura County real estate activity:
All went well over the last week (Oh….I should point out this is an abbreviated report relative to time. Normally I would cover 7 days; this report covers 6 days).
Sales continue to increase; listings continue to decrease; days on the market for sold homes shows an increase because of one property being on the market 336 days (the chart shows 536 days but that is wrong); the variance between list price and average sales price approximates 5% (which is still a little high) and total sales to date total 3,969 single family homes sold since the beginning of the year.
The market is showing signs of stability. Which is excellent for everyone in Ventura County.
Your comments are welcomed.
