In Ventura County, a Rebound for Real Estate
Responding to a broad-based economic recovery, Ventura County home sales this year will reach their highest level since 1989, and that surging real estate market has already produced the first uptick in housing prices this decade, analysts said last week.
“There’s no doubt about it whatsoever; this market has turned around,” said John Karevoll, financial editor for DataQuick, a statistical research service. “And it’s broad-based--we have healthy activity in all sectors.”
The rebound yielded a 14% increase in housing sales countywide during the first nine months of this year compared to the same period in 1995, and a 3.2% increase in the price of a typical house--the first good news for home sellers since the beginning of a six-year market drop that drained one-fifth of the value of a typical home.
And several real estate analysts say they are certain that the fickle recovery of the last two years is for real this time.
“This has been the turnaround year, and I say that not just from the number of sales but from the attitude of the buyers,” said Chris McClintock, president of the Realtors association in the Conejo Valley, where projections are for a 24% sales increase this year. “There’s a confidence in the home market, there’s a confidence in the job market, and there’s a confidence in our area economics.”
Particularly important, she said, is that mortgage interest rates have remained below 8% for a 30-year home loan. That, along with the slide in prices over the years, makes homes affordable for first-time and move-up buyers. “That’s a godsend,” she said.
In fact, real estate brokers from all parts of the county echoed the same theme: The market is back because of low interest rates, lower prices and the record number of jobs now available in the county.
Those factors have made houses in Ventura County--once more expensive than in almost any urban area in the nation--affordable again.
According to the California Assn. of Realtors, 41% of households in this county can now afford a typical $194,000 Ventura County house. That’s in contrast to the bleak days of 1989, when only 10% of households could afford a typical home, which was selling for $228,000.
“Interest rates are reasonable, prices have come down and they’re reasonable, and the panic-driven market of the late 1980s has been replaced by a tempered sense of what you can afford,” Karevoll said. “So the market is much more solid and much more stable.”
That is true for all of Southern California and even in Ventura County, where houses are newer, larger and more expensive, he said. Although mortgage interest rates have risen from about 6.5% to nearly 8% since 1994, sales in Ventura County should be the highest in six years.
According to actual numbers through September and Karevoll’s projections for the rest of the year, Ventura County home sales should reach 10,936 by Dec. 31, compared to 9,595 in 1995. He said that the median selling price will be up 2.6%, or $5,000, the first annual increase this decade.
The California Assn. of Realtors is making similar projections, estimating that the boost will be even larger across the state, with home sales up 17% for 1996.
“Statewide, we have been in the turnaround mode since the end of last year,” said G. U. Krueger, senior economist for the real estate association. “And for next year we’re saying the market will strengthen further by 7% in sales and 2% in prices.”
The surge of 1996 will probably even surpass the boomlet of late 1993 and 1994, when high sales were based almost exclusively on the lowest mortgage interest rates since the 1960s, agents and analysts said.
“In 1994, people either didn’t have jobs or were in fear of losing their jobs,” McClintock said. “Also we were in the middle of a flood of foreclosures, which created artificially low prices, and they’re not the driving force today that they were.”
Indeed, countywide foreclosures have dropped from a high of 339 in a single month--August 1992--to 231 in September and have fallen every year since 1993.
“For a long time, foreclosures really set the market in all price categories,” McClintock said.
Today real estate agents say they are getting decent prices for houses again because the glut of repossessed homes and the backlog of unsold houses are evaporating.
“The inventory is down and the sales are up,” said Bobbi Courselle of the Prudential-Jon Douglas office in Ventura. “I can tell mostly because our listing books have gotten thinner--from about three-quarters of an inch to half an inch.”
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In Ventura, for example, there are now 1,137 houses listed for sale compared to a peak of 1,500 to 1,600, she said. And in Oxnard, there are 1,012 homes on the market, compared to a peak of about 1,500.
Similarly, statewide numbers show that the supply of unsold homes has dropped from an inventory in 1991 that would take 20 months to sell to a backlog of just over half a year today.
“People are buying,” Courselle said, “because today you can buy a house and live in it for five years and you won’t lose money. People who bought houses in 1990 and had to sell in 1995 lost their shirts.”
“Homes are selling in all price ranges,” said Teresa Toomey, president of the Camarillo Realtors board. “It still has been stronger in the market under $250,000, but the market from $350,000 to $450,000 has picked up a lot this year.”
Vicki Gemette, president of the Realtors association in Simi Valley and Moorpark, said that new, moderately priced subdivisions are being sold out quickly.
“We’ve got one on the east end of our valley that opened up this year for $205,000 to $230,000, and they just swallowed up 75 buyers and sold out. Now Kaufman and Broad has opened up for $179,000 to $203,000, and they’re going nuts, too.”
But the most impressive indication that buyers are back, Gemette said, is that she is getting multiple offers on good houses for the first time in years. The bidding is especially high on repossessed homes that have federally subsidized mortgages sponsored by the Veterans Administration and the Department of Housing and Urban Development.
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“For VA and HUD repos, buying is at an all-time high,” Gemette said. “We’re seeing anywhere from eight to 18 offers on a property like that. We used to get two or three because buyers were able to negotiate just as well with a live seller. . . . Now things are so much better, everybody’s saying, ‘Hallelujah!’ because it’s been bleak, it’s been very bleak.”
The resurgence in home sales can be dramatically seen in mature communities and new subdivisions throughout the county.
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In Thousand Oaks, for example, the Meadowwood project at Lang Ranch has been the top new home seller in the county, selling about 200 houses over the last two years, broker Fred Priebe said.
That project and several others in the same area near North Ranch were delayed for years because of the market slowdown. But today the price of homes in Meadowwood is inching up.
The subdivision’s largest house, at 2,600 square feet, sold for $299,950 in 1993, but today sells for up to $339,950.
The typical Meadowwood buyer is from the west San Fernando Valley, a local buyer wanting a better home or a new employee at an expanding firm, such as biomedical giant Amgen. Indeed, employment records show that 3,900 new jobs were created in Ventura County during the first nine months of the year.
Likewise, the Cypress Pointe(cq) subdivision next to River Ridge Golf Course in north Oxnard illustrates both the stagnation of Ventura County’s real estate market in the early 1990s and its revival over the past year.
Once a 35-acre lettuce patch sold to a developer for $3 million in 1989, the 107-home subdivision was first conceived as a community of houses priced at up to $390,000 each. But before a single home was built, developers reduced dwelling sizes and their price tags so the largest house sold for $299,000.
And this year, the project finally found its market, with houses selling for $225,000 to $260,000. After closing just 49 escrows over three years, developers have sold 50 houses since January and they expect to sell the final eight by the end of the year.
