Real Estate Pendulum Swings to Buyers : Homes: Some builders have to pay closing costs and provide upgraded flooring and elaborate landscaping to make sales.
For Ventura County real estate, it’s the year of the buyer.
It’s the year of seller-assisted financing, the sweetened trade-in, drastic price cuts, prepaid closing costs and other inducements to purchase a home now.
At Walnut Court, a group of upscale new homes off Foothill Road in Ventura, the least expensive house has been cut $156,000--from an asking price of $575,000 to $419,000. Similar reductions have been made on the project’s other two remaining unsold houses.
In the Santa Rosa Valley east of Camarillo, Dave Norman of Dave Norman Real Estate Services is finally getting inquiries about a single-story view house, now that the owner has lowered the asking price to $439,000.
“The owner put the property on the market at $600,000 a year and a half ago, when the market was still strong,” Norman said. “Unfortunately, he was slow reacting to the turnaround. To get real action, he should have made deep cuts some time ago.”
At Standard Pacific’s developments in Thousand Oaks and Oxnard, buyers are asking for, and getting, free closing costs, upgraded flooring, elaborate landscaping and other options at the builder’s expense.
“We have to negotiate each deal on an individual basis,” said Paul Starke, president of Standard Pacific of Ventura.
Other builders are coping with their industry’s malaise by taking trade-ins and even paying above-market prices for them.
“In effect, these developers are unloading their unsold tract houses at less than the earlier buyers paid,” said Fred Evans, co-owner of Re-Max Gold Coast Realtors in Ventura. “The earlier buyers don’t realize what’s happening, so they don’t get upset.”
At one tract, a salesperson who requested anonymity said: “The buyers are driving us crazy. They tell us they appreciate everything we’re doing for them. Then they say, ‘But could you just do a few things more?’ ”
Sometimes, a real estate agent believes that the only answer to the slow sales pace is to pull a property off the market. Tim Hoctor, head of T.E. Hoctor & Co., a Ventura real estate brokerage, persuaded the sellers of a view home above Ventura College to lower their price to $389,000--well below what it would have brought in the red-hot summer of 1988.
“After six months, I still didn’t have it sold,” he said. “So I changed from a selling agent to a leasing agent. I convinced the owners to move to Fresno as they’d planned and forget about selling until conditions change.”
Most frustrated sellers can’t afford to bide their time as Hoctor’s clients are doing.
“Right now, you can get a nice two-bedroom home in mid-town Ventura for $175,000,” Hoctor said. “Two years ago, that same house probably would have cost $240,000.”
The median price of a home in the county in October was $239,620, down 0.7% from September and down 4.7% from the $251,360 of a year ago.
The downturn is a dramatic change from 1988, when prices in some areas climbed 30% or more within 12 months.
A comparison of the number of units sold in Ventura County during the past two years makes it clear why buyers are calling the shots in today’s market.
TRW Real Estate Information Services said 8,002 homes were sold in the county in the first nine months of this year. This compares with 11,141 in the first nine months of 1989 and 14,443 in the same period during 1988.
This year’s total, based on escrow closings, is 28% below that of 1989 and 44.5% below that of two years ago.
Sales of new homes in Ventura County in the first nine months of this year were off 40% from 1989 and 58% from 1988. Used-home sales declined 26.4% from 1989 and 42.4% from 1988.
The decline in new home sales is more dramatic than that of used ones, mainly because builders are finding it increasingly difficult to finance and launch additional projects.
The California Assn. of Realtors said sales in the county climbed 12.7% in October over September but were down 31.6% from a year ago. However, the association tracks only five of the county’s seven realty boards and does not report on condominium sales.
To Fred Drosten, president of Drosten Properties in Camarillo, the statistics make one thing clear. “We have to completely wipe the price spike of ’88 from our minds,” he said. “That year’s increases of as much as 50% were simply unearned.”
In the past few weeks, Drosten said, he and his agents have noticed an upswing in inquiries from prospective buyers.
“But they’re all looking for a seller who has to sell. If there’s any problem at all, they won’t give that seller two seconds’ time. They’ll go someplace else.”
Pat Fredericks, assistant manager of Coldwell Banker’s Westlake Village office, said that even though lenders are now offering fixed-rate mortgages at 10% interest or less, some buyers are asking sellers to fork over cash to lower the rates even further.
“It can help the buyer qualify,” she said. “But then, on top of that, the buyer may ask the seller to pay all the closing costs.”
Fredericks expects the market to stabilize “probably in the spring of 1992.” Other real estate people say a turnaround could occur by next summer if the economy improves and the Persian Gulf crisis is resolved by then.
Meanwhile, some people are trying anything--even burying a saint’s statue next to their For Sale sign--to move real estate.
“At first, we laughed at the idea when my mother-in-law suggested it,” Linda Miner said. “But then we thought:'Let’s humor her. Besides, it might work.’ ”
Miner and her husband, the Rev. Curt Miner, former associate pastor of Church of the Foothills in Ventura, had been trying to sell their east Ventura home since July, with nary a nibble.
In September, the minister’s mother, Edna Miner, sent them a tiny statue of St. Joseph, the patron saint of fathers and manual workers, along with a clipping from an Arizona newspaper.
“According to the article, some people had buried a statue of St. Joseph head-down next to their For Sale sign, and they sold their house almost immediately,” said Linda Miner.
The Miners’ broker, Jim Bruckner, said he thought that he’d heard everything, but he had no objection. So the Miners planted Joseph in their front yard--and received two offers within two weeks.
Escrow closed last month, and the Miners have already purchased a new home in San Bernardino County, where Curt Miner is now pastor of two Congregational churches.
On the mantel of their new living room stands the same statue of St. Joseph, which they exhumed.
But price cuts remain the most frequently used method of dealing with the soft real-estate market. Some of the steepest reductions have been made by J.M. Peters Co., developer of projects in Oxnard and Simi Valley.
In mid-October, Peters reduced the price of its 13 unsold River Ridge homes in Oxnard by $75,000. The tactic worked. Only two homes remain--at $365,000 and $440,000.
At its Autumn Ridge project in the Wood Ranch area of Simi Valley, Peters has made $60,000 reductions on all unsold homes. “And we’ll take another $15,000 off if you don’t have a contingency” that makes the deal dependent on the sale of another home, a Peters salesperson said.
Brokers say sales near the beach are holding up better than in most other parts of the county.
Condos, on the other hand, “have been hit hard,” Tim Hoctor said.
Even at the beach, condos are having problems, Fred Evans said.
“I’m handling a couple of ocean-view repossessions in Port Hueneme for an Eastern bank,” he said. “They’re quite nice, in a gated community.
“In a normal market, they would sell for $425,000. The asking price is now $363,000, with no takers. And I just heard from the bank. They’re getting ready to lower the price again.”
Sales of new and previously owned homes in Ventura County in the first nine months of the past three years.
Source: TRW Real Estate Information Services.