Impact is Starting To Take Hold…..Or Is It?
September 7th, 2009 Categories: Weekly Real Estate Activity In Ventura County
Much is being written about real estate turning the corner. Nationally this is true but locally (Ventura County) there are signs that perhaps the up-tick that was experienced over the last three months may have played itself out.
Through August, 2009 there has been a significant decrease in home sold that were in the $ 500,000 or less category. As illustrated in the chart below properties in the $ 200,000 or less sales bracket declined from 309 homes sold in the 2nd quarter, 2009 to 117 homes sold in the third quarter of 2009.
One can see the same for other categories up to around $ 600,000.
Home selling above $ 900,000 or more appear to be hold their own.
What is causing this? Unemployment and the lack of job creation. It has been reported that 57% of employable people are out of work. Now it appears that the public sector (local, regional and overall State) will also be cutting their work forces drastically over the next several months.
The mortgage market is of limited help as stringent conditions are being applied which eliminates many “wanna be” home owners.
Buyers are asking for the moon; sellers are holding fast.
So expect a stalling of home prices, sales and listing for the next few several weeks maybe upward of two to three months.
Evidence of this happening is noted in the chart below.
Ventura County had been experiencing price increases since February/March, 2009 time frame. But as illustrated in the chart August noted a significant drop in home prices on a month to month basis. It is hoped that this is a hiccup for the month only because of unemployment and perhaps the summer doldrums is playing a part in the scenario.
The weekly chart continues to show decreases in listings; a sideways action in the number of sales with a bias to the downside. But overall the County is still showing itself to be a seller’s market.
Again job creation (high paying), a decrease in unemployment are the necessary ingredients to propel the market upward.
Political double talk aside job creation and reduction of unemployment in California is taking on a monster stance. Historically tax decreases helped to right the ship faster. Today that does not appear to be tack being undertaken ….. all one hears or sees is that taxes have to increase across the board. This option simply reduces the odds of getting the economy headed upward.
As Donald Trump has stated on a number of occasions, we have to hand out pink slips to the politicians now in office. “YOUR FIRED” will set the tone and change the mindset of the people in Sacramento.
Your comments are appreciated.
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Comment by real estate — September 8, 2009 #