September Home Sales Skyrocket in Simi Valley

A high-end housing boom in Simi Valley fueled a continuing rise in the Ventura County home market last month, according to a report released Thursday.

Simi Valley home sales grew 115% over September 1997 and 9% over the previous month, according to the monthly report by La Jolla-based research firm Acxiom/DataQuick Information Systems.

Median prices also shot up $71,000 in the eastern half of the city, a 42.3% increase over last year.

Feeding off the city’s strong sales, the county housing market continued to climb in September, with sales rising 32% over last year and median prices jumping nearly 11% to $224,000. Avoiding the traditional fall slowdown, home sales also grew over the previous month to nearly 1,400.

Analysts predict a slight slowdown in October because of seasonal effects, stock market turmoil and a recent bump up in mortgage rates, but most expect home sales to remain solid through December.

“The market is very strong,” said Acxiom/DataQuick analyst John Karevoll.

Brian Troop, a real estate broker and president of Troop Real Estate in Simi Valley, attributed escalating sales prices in Simi Valley to a change in the kind of house entering the market.

“I think you’re seeing a lot of move-up buyers,” he said. “People are buying more expensive homes.”

But the factors feeding this year’s boom--low interest rates, job growth and confidence in the economy--are showing signs of weakening under pressure from the worldwide economic crisis and corresponding stock market volatility.

That could lead to a slowdown later in the year, said Mary Riddel, senior economist with the UC Santa Barbara Economic Forecast Project. “It should begin to slow down to some extent,” she said.

Troop said he has seen signs that even the Simi Valley housing market is leveling out. “Over the last 45 days, the demand has dropped off by as much as 20% from the previous month,” Troop said. He attributed the fall to declining consumer confidence and seasonal factors, including the beginning of a new school year.

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Karevoll and other analysts agree the market will even out by year’s end. “At some point it’s going to level off,” Karevoll said. “There’s a certain point where there’s no infrastructure or capacity for more activity. I think we’re not too far from that point.”

The Acxiom report includes sales of new homes, resale homes and condominiums categorized by ZIP Code. Most areas in the county registered double-digit sales growth in September, with Ventura and Simi Valley taking the lead.

West Simi Valley, a hot market in recent months, logged a nearly 124% increase in sales over last year.

In Ojai, a relatively stable market, sales also jumped last month, registering a 95% increase over September 1997 and a 44% increase over the previous month.

The surge in home prices has had ripple effects throughout the county housing market, said UCSB’s Riddel. “Everything about economic theory tells you that if housing prices are going up, then rents will go up,” she said.

For homeowners who purchased before the last real estate bust in the late 1980s and early 1990s, the surging market means a return to pre-recession home values.

“Only now, this fall, is California back to where it was in 1990,” said Acxiom/DataQuick analyst Karevoll.

In fact, the recession plays a big role in the continued strength of current housing markets, Karevoll said.

“Part of what’s fueling the market right now is that we had such a low turnover rate from 1993 to 1995,” he said.