Real Estate Is Starting To Sparkel Too…..
July 5th, 2009 Categories: Weekly Real Estate Activity In Ventura County
We are celebrating our 4th of July and many of us witnessed the sparkles in the night sky to remind us of our Country’s birthday.
As with the Country’s birthday real estate is now showing signs of sparkles as well.
Not with the dazzle of what we saw in the night sky on the 4th. It is somewhat more mute in the market place but the amber’s are there and when this side-way activity is complete there will a significant acceleration upward in home prices.
Items contributing to this price acceleration will include:
1. Of course there is the pent up demand that will make itself felt.
2. Cost faced by sellers to make their single family homes “green”.
On the surface it would seem that sellers will have to eat this added cost. But if Economics 101 taught us anything eventually these cost will passed through to the buyer’s thereby increasing prices.
How “green” green will be is any-one’s guess but in California one could expect that seismic upgrades may be required; perhaps solar panels and independent electric home grids; dual-pane windows; and who knows what else the Federal and State bodies will include.
What will probably happen is what I mentioned a number of years ago….we will have a two class society…..one owning property and those who do not and cannot because of the cost.
There most certainly will be an outcry for affordable housing but the conditions being applied will go counter to what is intended.
Ventura County.
The sideways action still continues with the County as a whole showing itself to be a seller’s market.
Simi Valley/Moorpark, Ventura, Oxnard, Camarillo, Santa Paula and Fillmore are all seller markets. The Conjo Valley and Ojai/Oak View remain neutral. Buyer markets continue in the Santa Rosa Valley and the Beach communities.
Sales since the beginning of the year total 3,869 single family homes. This is a 26% increase for a comparable period in 2008.
Prices have been inching upward since November/December, 2008 and it appears that in June, 2009 (see abbreviatedtable below) that the average home sale increased quite a bit. This trend (see monthly % column) was started about November/December, 2008 and has continued through June. This trend has to continue for the next few months to create the base required for accelerated prices.
Be aware of hiccups. There is the 2nd wave of mortgage problems coming onto the market; unemployment continues to be a problem; and new job creation is nil. But history has shown that the real estate market has plowed through these challenges and showed significant home prices.
When can one see these accelerated prices starting to take effect. Probably the latter part of 2010, early 2011. Between now and then there will be some meandering to the upside until 2013 then watch out.
I picture something like the following curve that will come into play. As you can see prices in 2018-2020 will have double those witnessed in the 2005-2006 time frame.
Who says real estate is not a good investment!
