Welcome to 2022. Annually we express hope that the new year will be better than the old.
While we hope that 2022 will be a more healthy year, a year without the restrictions we have been living with, it is difficult to match the numbers that 2021 provided to our real estate market.
Let’s begin by looking at how sales progressed through the year, and the total sales that accumulated by year end. 2021 was a banner year, with total sales (2,945) exceeding the previous five year average (2,429) by 21%. Considering it was a year hindered by COVID restrictions, 2021 was a very good year.
Simi Valley and Moorpark look the same, with total sales (2,429) exceeding the previous five year average (2,039) by 19%. While both valleys in this report would have experienced higher sales if they only had more available inventory, Simi/Moorpark dealt with a second year of very restricted inventory.
Conejo ended the year with only 92 listings, and only 15 priced below $750,000.
Simi/Moorpark ended the year with only 51 active listings, with only 15 priced below $750,000.
Both valleys exhibited a very different pattern than previous, “normal” years. Inventory generally increases as summer approaches, and then declines in the fall. For 2020 and 2021, there was no summer rise, inventory basically flat-lined, then decreased as fall approached.
Active inventory is the result of the number of homeowners listing their homes less the number of homes sold. COVID both created high demand along with a resistance by homeowners to sell their current home. That resistance was based on the feeling of physical safety and health by staying within the confines of your own home and the concern that a replacement home would be difficult to find and afford. Yes, prices increased dramatically. Median prices began 2019 at $750,000, and finished 2021 at $960,000, a combined two-year increase of 28%. Average prices, more influenced by the percentage of more expensive homes in the sales mix, began 2019 at $925,000 and ended 2021 at $1,222,000, a combined two-year increase of 32%.
Simi/Moorpark saw demand increase and low inventory even earlier than Conejo, since Simi/Moorpark has a more affordable price level.
Median prices began 2019 at $570,000, and finished 2021 at $760,000, a combined two-year increase of 33%.
Average prices began 2019 at $620,000 and ended 2021 at $825,000, a combined two-year increase of 33%.
The following review is based primarily on the entire year of 2021. Let’s see how sales in 2021 compared to previous years.
For Conejo Valley, sales increased dramatically from 2019, although we did not reach the total of transactions hit in 2005. Considering that was a runaway market, a bubble market, a market doomed to a horrific correction, no one should feel badly that we did not match that record This graph also shows the dramatic increase in sales of homes priced between $1 – $2 million, as well as those priced above $2 million..
For Simi/Moorpark, with more affordable prices, there was also a dramatic increase from 2019. Not only were more homes sold, but homes sold for a significantly higher price, with a large increase in homes now priced over $1 million.
Clearly last year was an above-average year. When COVID hit in the spring of 2020, everything shut down. Once the effects of working from home, with distance to the office no longer as important a factor, causing suburban areas to become more attractive, along with the need for more living space , the coming of home-buying age of millennials, shopping from home with Amazon, after years and years of not building the number of homes required, so many factors, that home prices rocketed upwards.
Let’s compare the average number of sales, pre-COVID, with the numbers generated by COVID and these other factors. Average of 2015-2019 monthly sales is expressed by the orange line. 2019, the blue line, saw a big dip in sales from March through May (these are closed escrows, so two months behind the discovery of COVID and the lockdown). Then sales took off. with the second half of the year’s extremely strong sales making up for lower sales in the first half of the year. 2021, the red line, did not experience that big dip, and sales were stronger than the 5-year average throughout the year. The path of 2021 sales is similar to what we expect in a normal year, although at a higher level. 2021 would have been even stronger if it were not for the extreme lack of inventory and the attendant rise in prices. Demand, inventory, and price are all inter-related, so I will not get into a discussion of what caused this to happen, they are linked together. Lower inventory causes prices to rise, higher prices usually cause demand to decrease, and lower demand causes inventory to increase. The best description I can give you about this market is that it is now stabilizing.
For Simi/Moorpark, the chart looks basically the same. Both valleys are excellent places to live. The comparatively more affordable prices in Simi/Moorpark are keeping their sales level higher and their inventory lower.
The above comments pertain to a full year.
We now go to the statistics chart we usually begin with. These statistics are based on a picture in time (inventory) and compare sales over a three-month period to the same period last year.
Conejo ends the year with 47% less inventory than last year, and prices up 13% (median) and 10% (average). The past few months have seen decreased sales in the highest priced properties, creating the difference between median and average. The number of sales compared to last year is down 11% over the past three months. This is due in part to increasing interest rates and a historically low inventory. Only 32 homes were available priced below $1 million. These homes sell in less than a week, the entire inventory of homes sell in two weeks. The figures at the bottom of this chart are heavily influenced by the strong price increases, which has moved the average price from the under-$1.0 million category to the $1.0- $1.5 million category.
Simi/Moorpark ends the year with 33% less inventory than last year. Last year began with already minimal inventories in Simi/Moorpark. Like Conejo, there were only 15 homes available priced below $750,000.
In Simi/Moorpark, prices were up 14% (median) and 12% (average). The number of sales compared to last year is down 7% over the past three months. Inventory was already low at the onset of 2020, only 76 homes. Similar to Conejo, only 15 homes were available priced below $750,000. These homes sell in less than a week, the entire inventory of homes sell in less than two weeks. The figures at the bottom of this chart are heavily influenced by the strong price increases, which has moved the average price from the under-$750,000 category to the $750,000 – $1 million category.
COVID remains a blanket over our lives. Delta has morphed into omicron. Delta was more deadly, omicron is more contagious. We all hope omicron will be the last variant.
This has been a sad and difficult journey. In the U.S., 850,000 people have died, more than the entire population of Ventura County. While we take a moment to review the good news in the 2021 real estate market, we also pause a moment to think of the 850,000 who are no longer among us.
Please stay safe. Please don’t get bored and cease to protect yourselves and your families, your co-workers and your clients.
Please accept my wishes for a happy new year, a prosperous and healthy new year.