It has been a good real estate year, covid notwithstanding. Covid has changed how we do business, in many good ways.
Let’s view how things are going as we enter the final two months.
Conejo is at an all-time low already, and inventory usually declines heading into year end.
Simi/Moorpark began the year very low and remained there. Actually, 2020 began the low-inventory period and it continued throughout 2021. The graphs all drop to new lows as the end of the year approaches, we expect Simi/Moorpark will be no different.
We could see fewer than 100 homes on the market in both valleys at the end of the year.
The gold line, the 5-year average of closed escrows, has been fairy consistent year to year. Then covid hit. In April, sales dropped like a rock, then shot up like a rocket. 2021 sales are very strong, higher than the average, but are now aligning with the same predictable path.
For Simi/Moorpark, below, the same result. Even in the face of low inventory, demand and sales remain strong.
CUMMULATIVE CLOSED ESCROWS
Conejo closed-escrows-to-date have already tied the average for the past five years, with two months left to go. 2021 will be our strongest year in recent (last 10 years) history.
For Simi-Moorpark, the same story. A record year.
These are monthly figures, different from the three-month-average figures in the tables below.
For Conejo, the average price at the beginning of 2020 was around $800,000. Two years later, we are pushing closer to $1 million, an increase of 25%.
For Simi/Moopark, the average price at the beginning of 2020 was stable around $600,000. Two years later, we are over $750,000, an increase of 25%.
When people ask the standard question, “How’s the Market”, I would use this statistic. Up 25% in two years.
The statistical tables show in numbers what the charts show in pictures.
For Conejo, inventory is down 50% from same time last year. Prices are up 11% in one year. It only takes 3 weeks to sell a home. Due to the lack of inventory, the actual number of sales for the most recent three months is down 9% versus last year. Both median and average prices in the Conejo are up over $100,000 from the same time last year. There are only 28 homes priced below $750,000 on the market in the Conejo valley.
For Simi/Moorpark, inventory is down only 5% from last year, but last year’s inventory was already non-existent. Due to lack of inventory, the actual number of sales for the most recent three months is down 1% from last year. Both median and average prices in Simi/Moorpark are up over $100,000 from the same time last year. Due to the influence of low inventory begun in 2020, prices are up about 16% from a year ago. There are only 43 homes priced below $750,000 available in Simi/Moopark.
Those are the statistics from last month. What of the future? See my blog from last month to read my forecast, as well as the C.A.R. forecast numbers for 2022.
Is inflation starting to become a factor? Absolutely. Yesterday it was announced that the Producer Price Index, the prices that manufactures pay for their materials, has risen 8.6% over the past 12 months. That means either future finished goods prices have to increase to protect margins, or that companies will begin to lose money. Those are increases that will be coming to consumers in the future.
Today the consumer price index was reported as an increase of 5.9%. The unemployment rate is 4.6%. The FED has begun to taper their purchase of Treasury and Mortgage bonds. That is step one. Step two is a likely rise in interest rates to control inflation. Home buyers should lock in mortgage rates quickly.
Things are changing for the better as far as covid is concerned. Therapeutics, medicines used to treat covid, have been developed and are awaiting approval by the CDC. The percentage of people over 18 in Ventura County that have received at least one shot is over 83%. Expect some outbreaks, but covid is no longer in charge.
Stay safe, stay healthy, and enjoy a Thanksgiving holiday with family and friends. We have a lot to be thankful for.