Published On: August 15, 2022486 words2.4 min read
Clearly our Country is experiencing a real estate slow down due to the rise in mortgage rates and fears about our economy, but real estate markets vary significantly and the impact locally is less pronounced. If we all agree that scarcity (Supply and Demand) drives price than our local real estate market is well insulated from the widely televised real estate slow-down. Perhaps it would be helpful to comment on resent “news” reports regarding real estate and how they apply to the Conejo Valley:
“Price reductions” – Yes, we have had some price reductions recently, but I would argue the homes in question were not priced appropriately to begin with due to what I call the “neighborhood” affect. For example, Bob lists his home for $1ml and it sell immediately. Jane across the street knows her home is much nicer than Bob’s so she lists her home for $1.1ml and it sells immediately. Fred from around the corner sees all this and he has a swimming pool, so he lists his house for $1.2ml and it sells immediately. Silvia down the street from Fred knows her house is much nicer than Fred’s so she lists for $1.3ml and nothing happens. After 30 days she reduces her price to $1.2ml and the home sells. That’s almost an 8% price reduction, but I would argue that Silvia’s home was never worth $1.3ml. Her home had increased in value by 20%+ over a matter of months and eventually the market (Buyers) develops doubts.
“Increased marketing times” – Yes, marketing times have increased, increased from record low levels to levels which are still well below normal, 30 to 45 days. Don’t forget about the neighborhood affect detailed above, are today’s listings priced appropriately?
“Real Estate Slow Down” – If local homes increased in value 20% last year, plus an additional 10% +- year to date, is the rate of increase slowing? Are prices still going up?
“Increased inventory” – Yes, we are experiencing an increase in the number of homes on the market, which is good. Just a couple of months ago the Conejo Valley experienced the lowest number of actively listings (less than 100) since the Board was established in the 1960’s. My search this morning found 288 active listings in the Conejo, a large increase, but a small number for a community with 130,000+ residents. When I moved to the Conejo in the 1980’s there were more than 1,200 active listings.
Long story short, if you’re waiting for prices to fall… fall below 2021 prices… you might be disappointed. Wondering what your home is worth now? Give me a call.
Thousand Oaks Market Update
Median price: $1.2ml, down 16% from one year ago
Number of home sales in April: 52, down 32% from one year ago
Active listings: 49, up 4.3% from one year ago
Median days on market: 22
Sale to List price %: 106% (homes are still selling for more than list price)