Often we think of a Plateau in geographic terms: a large, elevated area of flat land, typically with steep slopes, called escarpments, on all sides.
But we can also describe a chart as having a plateau: a state of little or no change following a period of activity or progress. I have worked with people that deal in commodity markets who are chartists. Chartists decide which way the market is going to trend in the future based on the shape of the graph rather than the fundamentals of the market. Charts can help us see things that otherwise we may miss.
I have been following our two valleys, valleys that are markets that vary in many characteristics, yet share many of the same forces that affect the real estate market. They are similar, and they are different.
To begin, lets look at the Price charts of both markets.
Conejo Valley prices have shown to be seasonally variable, increasing as summer approaches and decreasing heading into winter. But from the chart below, you can see that the summer peaks of both Average and Median prices have hit a ceiling for the past four years in a row. They have plateaued.
Simi Valley/Moorpark is a different market in many ways. I have not drawn the plateau lines for Average and Median because they have not plateaued. In addition, the seasonal variations experienced in Conejo of rising towards summer and receding towards winter are not easily discernable in Simi/Moorpark.
Why are they different? One reason is what marketers call a “product mix”. To look at that product mix, let’s compare the two tables below that I use to summarize the market.
Conejo has basically the same number of listings this year than last, average days on market is comparable year to year, as well as months of inventory, plus a similar number of sales that closed escrow. The major differences took place in Median and Average prices, down 12% and 10% from last year.
Now look at the bottom half of the table above. The lowest price trauche of home sales was up 4%, but the hightes price traunche was down 20%. The most active traunche was between $750,000 and $1 million, just under the Median sales price.
Now lets compare Conejo to Simi Valley/Moorpark. For Simi/Moorpark, active listings and the number of sales were also comparable to last year, as were months of inventory. Median Prices were down but only by 1%, and Average Prices down 6%, as compared to the double digit decreases for Conejo. Looking at the bottom half of this table, the number of actual sales priced below $1 million increased considerably, while the number of home sales priced over $1 million decreased dramatically.
Conejo inventory numbers report 42% of listed homes were priced below $1 million while 58% were priced over $1 million.
Simi/Moorpark inventory reports 70% of listed homes were priced below $1 million, while 30% were priced above $1 million.
Sales figures for Conejo show a 20% drop in 3-month sales of homes priced above $1.5 million, from 162 last year to 130 this year.
For Simi/Mooprark, that same group shows a 23% drop for homes priced above $1.5 million, registering 20 this year versus 26 last year, a much smaller sample population.
Conejo is more highly influenced by the highest price home sales, whereas Simi/Moorpark is better represented by the homes that fit into the mortgage limits set by Fannie and Freddie. Because of this difference, the overall market in Simi/Moorpark more is more sensitive to mortgage rates, while Conejo depends more on the differences between real estate as an investment compared to other competing investments.
Looking further into inventory, here is the chart for Conejo. Inventory in 2026 is very closely following 2025, as compared to the low numbers in 2024 and even lower numbers from 2023. We do not have a shortage of inventory. Look at the numbers in the inset box for the different traunches.
For Simi/Moorpark, the chart of active listings is very similar. No shortages here either.
Now to sales. Conejo closed escrow levels have been steady for the past four years. Interestingly, going back to our first chart involving prices and plateaus, both the price chart and the closed escrow chart have similar shapes for the past four years, with sales achieving only 68% of the 4-year average between 2016 and 2019. Current sales are 2/3 of what used to be considered normal,
For Simi Valley/Moorpark, sales over the past four years are also at a reduced level. Closed escrows over the past four years represent only about 58% of the 4-year average from 2016-2020. Simi/Moorpark sales have taken a bigger percentage hit.
Looking at cummulative sales as they add up beginning in January, both valleys follow similar tracks. You can see 2026 Conejo cummulative sales beginning to surpass the past three years, but only by a little.
Simi/Moorpark sales totals as the year progresses are similar.
Explaining and measuring our markets is not one picture, but a group of pictures. There is a little improvement in sales activity this year compared to the last three years, (I have left the Covid years out of this discussion, as they were outliers).
I was surprised to see that prices have not dramatically changed for Conejo Valley over the past four years, while Simi/Moorpark showed a decided upward trend in prices. Simi/Moorpark is more affected by mortgage rates, and even by expectations of mortgage rates changing.
But both valleys are affected by the larger investment market. Changes in a wide range of interest rates also affect mortgage rates, generally accepted as being most closely related to the 10-year treasury bond.
Purchasers of high priced properties have alternatives to consider. These buyers look at homes more as an investment vehicle. For high-priced home buyers, higher bond prices and the stock market are alternatives to real estate ownership in their investment portfolio. They may choose to be cash buyers or to take out a mortgage, based on their overall financial analysis of where they want to invest their money.
Lower priced homes are generally purchased with mortages by buyers who look at homes over the long term as their main source of wealth creation. These buyers, particularly first-time buyers, would like to buy, but the current interest rate market not only limits their ability to buy, but also decreases the amount of mortgage that they qualify for, thereby limiting the price of home they can afford. They compare what their mortgage payment would be against their lease payment. Also now affecting affordability is the dramatic increase in insurance cost, which lowers home affordability even further.
That’s the past, what of the future? A recent ARTICLE in the New York Times did not paint a promising picture for interest rates and inflation. There is a war still going on. Recently, job creation took an unexpected tumble. There is actually a word to describe an economy that has both inflation and concerns over a recession: Stagflation. Let’s pray we don’t get into that conundrum.
What about other issues discussed in my recent postings?
Our National Debt continues to rise, you can see the latest HERE. It is up $2.2 TRILLION year to date. That does not suggest interest rates will be coming down. We need to be balancing the budget rather than borrowing more money on our country’s credit card if we want interest rates to come down.
What about consumer confidence? Could that keep the economy pumped up? Unfortunately, no reason there to change my views.
The 21st Century Road to Housing Act will help, but it is not a quick fix. It will take time to implement the benefits provided in that bill, many items needing over a year to implement.
I see little to change the activity and direction of our real estate market. Expect more of the same. A decent market, but restrained.
For now, keep track of what the market is doing and make sure you share that information with your clients. They want to know the value of their house, and the price of the one down the block that just sold. Be the expert they trust. Be the trusted advisor they go to for real estate news, for information and guidance.
Chuck