Time To Go Back To The Future. Ventura County Real Estate Doing’s for Week Ending Nov 22, 2008
November 23rd, 2008 Categories: Weekly Real Estate Activity In Ventura County
Real estate is on the rebound.
A recent article in Forbes listed five cities on the re-bound. Aside from Seattle, Los Angeles was #5 on the list. They also stated that Detroit was the place to stay away from.
Side bar: For investors I still think that Oklahoma, Texas (not as much now but it is still OK), Mississippi, Louisiana and Tennessee (I’m late on this one) are great areas to invest. Detroit still has a ways to go but keep an eye on Michigan because within the next year or two it will be a great place to invest.
So there is an attitude change in real estate with a number of guru’s voicing optimism that the bottom has indeed been reached. So what now?
Remember our domestic shock and awe experience with gasoline. When gas hit $4.00 or more per gallon, this put a shock into the system. People were stunned with such a quick run up and even today with gasoline prices declining people have not been able to put that shock behind them.
Side bar: Coal. There are applications of converting coal into oil. From a military standpoint this is the way to go with the current world conditions. Our military cannot be held hostage to the oil cartel. We need the capacity to defend ourselves. To be sure no one else will defend us.
People just do not believe what they are seeing with oil and think the current down turn is only respite. People expect prices to go up again. (What ever happened to those investigations that were to isolate the culprit(s) and reasons for oil prices to run up so quickly. How soon we forget.)
Expect the same attitude from the consumer regarding real estate. They want to see a sustained balance in the market before acting. A great number of people were shocked at the high prices during the period of 2001-2005; now they are more shocked at the home price declines.
Do not expect a buyer’s rush into the market. People are nervous and will be slow to act. But real estate prices will go up and they will go up farther than the previous peaks.
Add to the mix ”what is the new administration going to do?” My thoughts suggest that we are going to take time to go back to the future.
Despite all of the news reports history tends to balance what administrations can and won’t do. Lincoln, Franklin Roosevelt, Clinton, Kennedy are being highlighted in most news accounts as to what one can expect from the new administration.
What did these folks have in common. They created changes starting from a base of war and people’s exasperation’s.
But (and this is a characteristic with Americans) we have and know there is opportunity and optimism, so we do not dwell on the negative too long. We are growth and future oriented. It’s a gene that has been passed down from our Pilgrim parents and others that have made the United States their home.
Politicians know that big changes if done quickly will impact people and the economy, negatively (in general). So there will lots of balloons released to get readings of the national mood before implementing wholesale “new deals”. People can always change whose in office. They may have to wait two or four years but eventually they get what they want.
Ventura County.
It continues to be the same story. Listings are decreasing; number of properties sold continues to show increases; days on the market for actual home sales appears to have settle in at about 3 months and the variance between list price and actual sales price continues to hover around 5%.
But watch for the surprise. The spring is being pressed down into a small container and once it pops prices will go upward, not quickly at first, but with a vengeance within a short period of time. There is a pent up buyer’s need building. View the last chart of this article to get a sense of prices that will occur.
Look at inventory noted in the second chart below. It has decreased from 15 months down to approximately 4 months within the year. This suggests a neutral market at this time. Generally when inventory decreases to 3 months or less it becomes a sellers market. We are almost there.
Unemployment (approximately 7+% in the County) will initially act as a control on real estate prices but this control will be short lived.
2008 Ventura County monthly SALES. Inventory is spiraling downward. Good news for sellers because shortly it will be a SELLERS market in Ventura County.
And this is what one can expect happening when people sense that the market is balanced and they have a feeling of certainty. It is happening now.
Comments please.
