Home Buyers Drawn Into Local Bidding Wars
Ventura County’s booming real estate market means different things to different people, but first-time home buyer Janet Welsh has one word to sum it all up: pressure.
“There’s huge pressure on the buyer to bid the asking price or higher right now,” Welsh said. “It’s frustrating, because you know you’re paying more than you probably should be.”
Welsh, like prospective buyers across the county, is trading tales that home shoppers in Orange County and West Los Angeles have been telling for months. They are finding that homes are scarce and that paying more than a seller’s asking price is no longer uncommon.
Yvonne Gustafson, a supervisor at the Thousand Oaks post office, is one of those buyers. Married with one child, she and her husband were looking for a larger home in Thousand Oaks. They thought their search was over after offering $420,000 for a home listed by the sellers at $409,000.
Wrong. They lost the house to a higher bidder--and are still looking.
“We thought we had the house,” Gustafson said. “I was starting to think about where I was going to put the furniture.”
Gustafson has seen the market from the other end, as well. When she and her husband put their current home on the market, it sold in one day, leaving the family scrambling for another one.
“We have about a month, and we’ve been looking at storage places,” she said. “If we had known, we would have gone home shopping first.”
Had neighbors not offered to put the family up for a short time, “we’d be staying at the local Super 8 motel,” Gustafson said. Barring that, she quipped, “we still have a tent.”
Real estate agents say such stories are becoming increasingly common as the Ventura County market heats up.
Jim Keith, president of the Conejo Valley Assn. of Realtors, said a drop in available houses is driving much of the increase.
As of June 29, he said, there were 509 single family homes on the market between Newbury Park and Agoura. “That’s the lowest I’ve ever seen it,” he said. “A balanced market is probably around 1,000 [homes].”
Lisa Sabo, a broker with Realty Executives in Ventura, agreed there are countywide shortages in new and resale homes.
“There’s very little inventory,” she said. If slow-growth ballot measures succeed this fall, Sabo continued, there may be even greater pressure on housing prices as the available pool of open land dries up.
The boom will continue, UC Santa Barbara economist Mark Schniepp said, because it is based on fundamentals of supply and demand, not on speculative behavior.
“There seems to be a bona fide demand for housing being driven by need,” he said. “We don’t believe there’s necessarily a time when prices are going to fall any time soon.”
Schniepp suggested that now may be the best time for buyers and sellers.
Interest rates may go up, Schniepp said, making it more expensive for buyers to borrow and making it harder for sellers to sell quickly. And prices may well continue to rise, giving buyers an incentive to buy now.
Housing Scarcity
First-time buyer Welsh, controller for the Sherwood Country Club, said she experienced housing scarcity firsthand.
Welsh, who is single, wanted to move from a rental home in Brentwood because “the commute got to me.”
Early in her months-long buying adventure, Welsh said, she bid on a house that had been on the market for only hours. By the time she returned to her agent’s office, three other prospective buyers had bid on the same property.
The sellers, who listed the home at $259,000, came back with a counteroffer even higher than their original price: $265,000, far more than she was willing to pay.
And the market got tougher as the search went on, Welsh said.
“A month later I saw houses that were just the same thing that were $10,000 more,” she said. “I could no longer get what I was intent on getting for the same amount of money.” She eventually purchased a house in Agoura Hills.
Jeff Roundy, owner-broker of the Fred Sands Ventura office, said it has become common for sellers to increase their prices after receiving initial bids.
One seller, Roundy said, had his house on the market for five months before getting a serious bid, but refused to lower his $195,000 list price. Instead, the seller is now asking $205,000.
Another one of those buyers paying more than the asking price is David Morehead, a Santa Monica businessman who moved into the area because he is forming a business in Camarillo. He said he had to bid above the asking price, but acknowledged that it was just a “reality” of the county housing market.
Booming Economy
Realtors and analysts say several factors, in addition to scarcity, are driving the current high-pressure housing market.
First, interest rates are at near-record lows, making it cheaper for buyers to borrow money.
The second factor, they say, is an expanding economy that is bringing jobs, and new residents, to the county and the state.
The result, analysts say, is housing prices nearing levels last seen in the late 1980s.
According to the research firm Acxiom/DataQuick, median prices for all Ventura County homes in May were up 6.5%, or about $13,000, over the same month last year. Existing-home prices were up even higher, gaining about $18,000, or 8.8%, from last year’s mark.
These gains are all the more impressive because existing home sales in May were at their highest level since June 1989.
Rising housing prices also bring more people into the market, people whose homes rapidly lost value after the last housing boom ended, said DataQuick analyst John Karevoll.
“Only recently have prices come up to the point where they don’t owe more on the property than the property is worth,” Karevoll said. “As prices increase, a lot of people who were locked into their home ownership will come back into the market.”
But Karevoll, whose company does not track housing supply, said stories about housing scarcity should be taken with a grain of salt. “I don’t think the housing shortage is as acute as some would have you believe,” he said.
