Buyer’s Market--House Sales Drop 35% : Real estate: Some brokers say they have three times as many houses listed as they did two years ago, but only half as many potential purchasers.
Ventura real estate agent Janey Messmore finally found a buyer last week for an attractive yellow house on Loma Vista Road, after six months and a price cut of $57,600.
Messmore’s experience sharply contrasts with the area’s hot real estate market of two years ago. A colleague, Camarillo realty agent Clarence Bales, recalls receiving an offer for a similar home in 1988 as he was planting a “For Sale” sign on the front lawn.
To hear many agents tell it, this year’s soft California real estate market has turned to mush in Ventura County.
Only 490 existing single-family homes were sold in the county in May, a month traditionally marked by swift springtime sales. That figure represents a 40% drop from May, 1987, and a 35% reduction for the month in 1988, according to the California Assn. of Realtors.
The slowdown in Ventura County is considerably worse than that experienced in the state as a whole. Statewide, the association reports, house sales in May were down 13% from the same month in 1987 and 20% from May, 1988.
Throughout the county, it’s a buyer’s market. But realty agents said that is hardly a comfort to many prospective buyers who must sell their own homes before buying a new one.
Paul A. Starke, president of Standard Pacific of Ventura, which has developments in Thousand Oaks and Oxnard, says he’s had to sell some houses “two or three times” because would-be buyers failed to sell their former homes. “We’re not cutting prices because we feel that would be unfair to those who have already bought,” he said.
Real estate brokers offer several reasons for the soft market, including publicity about the slowdown that, in turn, prompts some potential buyers to hold off in the expectation that prices will continue to fall.
But most experts say the slowdown is caused mainly by the high price of houses that remain out of reach of most first-time buyers. Prices have come down some, but not nearly enough to make a single-family house affordable to the average first-time buyer, these experts say.
The California Assn. of Realtors reports that only 12% of Ventura County’s families can afford to buy a median-priced home. In May, the county’s median price was $238,216.
With a normal 20% down payment, a buyer of a $238,000 home would have total monthly payments, including property tax and insurance, of about $1,990. To qualify for a fixed-rate mortgage at the current interest rate of about 10 1/4%, the buyer would need an annual household income of more than $70,000.
Two years ago, house prices were significantly lower and nearly twice as many county residents--23%--could afford to buy the median-priced home of $195,477.
In Thousand Oaks, Wally Malesh, manager of the Lamb Realty office there, said brokers in his area have three times as many unsold houses on hand as they did two summers ago. And, he said, they are making only half the number of sales.
“Obviously, we have more supply than demand,” he said. “In other words, this is a classic buyer’s market.”
In Simi Valley, Pam Silverman, a realty agent with Coldwell Banker, says her office will try to stir up interest on Saturday by holding a buyers’ fair, complete with hot dogs, balloons, clowns and “lots of information about housing opportunities” in Simi Valley and Moorpark.
“I think a lot of brokers got a little spoiled when the market was hot,” Silverman said. “We’ve got to get back to reality and realize this is a more normal market than we had a couple of years ago.”
Clarence Bales, manager of Century 21 Central Coast realty in Camarillo, looks back on the hot market of two years ago as “a feeding frenzy.”
“Interest rates were down into single digits for the first time in years,” he said. “Brokers joked about carrying ‘Sold’ signs with them when they went to put up ‘For Sale’ signs.”
He even recalls needing a “Sold” sign when he listed an ordinary three-bedroom, two-bath house on Corby Avenue. “Within two days, we had three offers at the full asking price,” he said, “and not one of the bids was contingent on the sale of another house.
“One lady was driving by and saw me putting the sign up. She ran in and made an offer.”
Now, Bales says houses such as the one on Corby are still moving, but, he said, “many people are still asking the over-inflated prices of the past.”
These prices, he believes, have driven two important types of home buyers--investors and first-time buyers--out of the Camarillo housing market.
“Investors are finding they can’t get enough rent to justify their monthly payments, and most first-time buyers can’t qualify” for financing, he said.
First-time buyers have difficulty, Bales said, because they do not have any equity from another home to use as a down payment. Usually, this leaves them with a large mortgage and hefty monthly payments.
Bales said the county’s housing sales also have been hurt by the Board of Supervisors’ failure to adopt Proposition 90. That statewide initiative, if adopted by the county, would allow retirees and others to transfer their low property tax rates guaranteed by Proposition 13 if they traded down to lower-priced homes here.
Los Angeles, Orange, Riverside and San Diego counties are among those participating in Proposition 90.
Although many real estate agents in the county say they are struggling, George Kite, manager of the Telegraph Road office of Don L. Carlton Realtors in Ventura, said condominiums and beach-area homes are selling fairly well in that city.
But Kite, who is chairman of the Ventura Board of Realtors’ Multiple Listing Service, acknowledges that houses in the $200,000-to-$215,000 range are “soft.”
Kite’s outlook on condominium sales is in the minority. Other agents in the county say condos are moving slowly.
“A couple of years ago, it definitely wouldn’t have been this difficult,” said Ventura realty agent Messmore, who finally sold the house on Loma Vista last week for $279,900. The initial asking price for the three-bedroom, two-bath house was $337,500, she said. In 1988, she said, “a house like this might have sold as soon as the sign went up.”
The poor market has prompted many sellers to sweeten deals for would-be buyers. For instance, Standard Pacific of Ventura, a large developer in the county, has picked up extra sales at its two projects in Thousand Oaks and Oxnard by offering upgrades and other incentives other than cutting the sales price. “We . . . try to help people in other ways--with their closing costs, for instance,” said Starke.
“If you’re a seller, don’t be greedy,” said John Herrick, president of Herrick Property Management and current president of the Ventura Board of Realtors. “If your neighbor sold for $270,000 last year and the best offer you can get now is $260,000, take it. If the buyer has money in hand, that’s a real good offer.”
