The housing market in the Conejo Valley, the areas of Agoura, Oak Park, Westlake, Newbury Park and Thousand Oaks, is as hot as our summer temperatures. The reason is supply and demand. Inventory is down, while sales are up.
On July 1, the inventory of homes for sale in the entire Conejo Valley was only 486 versus 837 last year, a precipitous drop of 42%. Five or six years ago, there were about 1200 homes on the market. Significantly, the inventory of homes priced below $750,000 represents only about one month of current sales, compared to the normal inventory of about six months.
The number of closed sales is up 16% versus last year. When there is strong demand and low inventory, economists forecast prices to rise. Many homes are attracting multiple offers, often at full price and higher.
Supply and demand for leases are also supporting housing prices. Occupancy rates are high and rents are rising, up to 10% a year. Renters can often purchase a home and pay mortgage and property taxes at a level equal to their rental payment. Locking in low mortgage rates for 30 years protects them against ever-increasing rents.
Many investors are buying homes with all cash purchases. In the past year, reportedly 30% of lower-priced properties were purchased with all cash. Often these rental properties can achieve positive cash flow in the first year.
Most banks are now taking the path of short sale rather than foreclosure. Of the 486 homes listed for sale, 43 were listed as short sales and only 8 were foreclosures. That’s right, only 8. While lenders previously demanded that the short sale seller not get a penny from the transaction, some banks are now offering sellers as much as $30,000 to execute a short sale on their property, and short sales are receiving bank approvals in weeks, not months.
To find out how real estate market is doing in your neighborhood, call me, Carol Lee at 818-642-9445.