People Are Talking….
May 10th, 2009 Categories: Weekly Real Estate Activity In Ventura County
On this Mothers Day it 
appears that real estate is a good topic to talk about since the indicators now have been accepted by the media.
Good press from news outlets is also creating positive vibes for the market.
To be sure the politicians will play the game but when push comes to shove they had little to do with the change in direction.
The market would be doing the same with or without them. One should be concern that the politicians will once again stick their nose into the system and screw things up.
The good intentions of a home in every pot did not work out. In fact a great many people have been hurt with this political folly. But intentions aside the system is going back to hard nose business basics and this will continue for several more years and then the follies will start over again.
There will be some significant economic events that will slow the market but it will not create a free fall as had been the case over the last few years.
Economic events that will slow the market:
- gasoline will go back up to $ 4.50 or higher. Throughout the World and in the United States, oil people are not drilling, plant capacity increases have been shelved.
- Food prices will sky rocketbecause of ethanol and less planting in the farm land. Politicians know this is a folly but want to continue the folly to satisfy constituents and save face. Ethanol has been shown to be a pollutant but the folks in Washington have too much invested to yield to common sense today.
- Environmental costs (cap and trade) will be a hideous tax on the United States with most other Nations giving lip service but basically by-passing this issue.
- California is going to the brink of bankruptcy. It’s a matter of wills but Sacramento will realize that unless significant cuts are made they will be out of a job.
The National real estate market will continue to plod upward because States and local agencies need to have real estate do good to collect taxes.
Ventura County.
The Ventura County real estate market as evidence by the table below is doing well. There will be hiccups but it appears that the base has been settled. We should continue to witness an increase in sales but it will take a little longer for prices to start upward. One will see sales continue to make a V shape configuration while prices will follow a U shape configuration for the next several months.
This table also notes that the Simi Valley/Moorpark, Ventura, Oxnard, Santa Paula and Fillmore areas as seller markets. The Conejo Valley and Camarillo are neutral and the other areas (Ventura Beaches, Oxnard Beaches and the Oak View/Ojai) are buyer markets.
Overall the County is a neutral market and has an average 4 months inventory.
Unemployment and the lack of job creation in the County will cause a side-ways motion until the last quarter of 2009.
Job creation is going to be a zinger. Large and medium size businesses will be facing significant increases in employee health care and taxes. This does bode well for job creation. Visit My Musings Of The Week and I think you will get a sense of what is in store.
What may help is the significant increase in sole proprietor-ships and federal, state and local governments hiring.
However the public sector is over weighing the economics of scale and eventually there will be a drastic decreases in head count as time marches on.
The general public and the private sector will not be able to shoulder the burden and all sort of changes will take place which will not be very pleasant for a lot of people.
Expect big changes in educations and State government headcounts. The tea party is set to begin.
This next chart (below) shows the distribution of single family residential sales in the County for the period of January 1, 2009 through May 9, 2009. Approximately 25% of the homes sold in the County in this time period fell into the price range of $ 300,001 to $ 400,000. 65% of all single family homes sold in the County was for $ 400,000 or less.
75% of the homes sold in Oxnard were below $ 300,000; 82% of the homes sold in Fillmore and Santa Paula were below $ 300,000. These communities accounted for 37% of all sales in the County for the period ending May 9, 2009.
Periodically I will update this chart but I suspect significant changes towards the upper price ranges towards the latter part of this year.
The projection that had been made last September, 2008 http://www.venturacountyretalk.com/2008/09/07/ventura-county-real-estate-doings-for-week-ending-september-6-2008/ appears to be on track.
Illustrated in the September, 2008 article was the Ventura County Forecast through the year 2022.
As noted it is expected that the previous highs (2003-2005) will be exceeded by at least 50% or more in Ventura County. Those living within 25 miles of the ocean can expect higher appreciation.
As mentioned earlier the U configuration price jumps will really show up around the year 2014 and then watch out.
There have been many homes withdrawn from the market place over the last several years waiting for better prices. Listings have continued downward so in effect what is happening is a “spring” effect will take place allowing prices to surge upward as shown above. Standard economics 101, supply and demand.
Your comments are welcomed.
