Out With The Old; In With The New.
January 3rd, 2009 Categories: National and Local Real Estate Appreciation Forecast
Some areas of Ventura County really took it on the chin in 2008, especially the last quarter of the year.
Ventura Beach properties did remarkedly well in the year 2008 (appreciating about 12%); all other Ventura County areas were hit with a -12% to -57% decrease in property value.
Fillmore was hit extremely hard with a -57.2% (yes that is a negative sign) decrease in values between the period of year 2007 and the end of 2008. Why?
Ojai/Oak View, Santa Paula, parts of Oxnard and of course Fillmore have had high foreclosures and lending institutions and appraisers have been low balling values in these communites for quite some time. Lenders perceive these areas as too risky.
Not all was bad. As noted in the following chart over the course of the last 15 years Ventura County has done well in maintaining property values. Over this time span Ventura County has enjoyed approximately a 10% annual growth in property values.
Even with the sharp declines witnessed during 2008, prices today resemble prices in the County for the years of 2003 and 2004 (which ranged in the $ 460,000+ to $ 579,000 price area). As noted on the chart there were three years of 25% appreciation in the County before signs of an adjustment starting to take place (starting in 2005).
What is in store for the County in 2009? As noted in the first chart above Ventura County will have an appreciation rate increase of about 8% ending in the year 2009.
This estimate is based on 3rd quarter, 2008 information issued from the Office Of Housing, Washington, D.C. Yes there will be some adustments when the 4th quarter information is released but the change should be insignificant.
Should unemployement exceed 10-11% in the County and job creation is zero or negative then there will be a significant impact to the numbers. But it is not expected that unemployement will reach 11%.
Noted in the graph below is the expected growth for the County into the year 2022. The year 2009 should be a good year.
After that just watch out. In 2020+ prices will exceed prices set in the 2005-2006 time frame. Gads! If I can live to 2020+ and see if all of this really happens will be great but the numbers suggest that the Ventura area will start an upswing with a vengence around 2014. Prices in 2020+ will probably double the 2005-2007 prices we have just witness. So hang on it is going to be a great market.
For those of you interested in areas outside the State of California or other California sectors the next table shows the expected price appreciation for these areas. So if you are an investor prepare yourself for some good investment opportunities starting in 2009.
Outside of the State of California, Boston, Detroit, Phoenix and Reno look like they may be good investment areas.
But……invest in areas where you would like to live. Who knows….circumstances may change and you may see yourself having to live in Boston or Detroit.
One of my tenets for investing is to invest in areas that I might have to live in and the second part to that is to buy only NEW anything. I do not want to inherit somebody else’s problems. By buying new I know that the problem didn’t exist before and while that may be some consolation (for me) I recognize that whatever the problem may be the correction, cost wise should be minimal (I hope).
Directing attention to areas in California. Chico, San Luis Obispo, Santa Barbara and of course Ventura County appear to be good places to invest. The problem I see in these areas will be “can one break even monthly” or will they be faced with a negative monthly cash flow.
Again one has to take pencil to paper and figure it all out. What looks golden to one may be a rotten egg to another.
Your comments are welcomed.
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