2020 will prove to be memorable, hopefully in a good way. For 2019, inventory was low, sales were high, but prices refused to respond. Now that we are two months into 2020, comparing February (3 months worth of data from December to February) to the same period last year, prices have finally begun to respond aggressively.
Inventory is down 28% compared to last year, the number of sales are up 2%, and months worth of inventory declined from 3.1 months to 2.2 months. The time a property was on the market dropped from 9 weeks last year to only 7 weeks this year. That has pushed Median prices up 6%, and Average prices up 9%. For properties priced below $750,000, Conejo only shows 65 listings for one month worth of inventory.
Sales numbers for properties below $750,000 declined 9%, mostly because there are fewer properties under $750,000, influenced by rising prices. Sales of properties priced between $750,000 and $1 million increased 11%, and sales of properties priced between $1 million and $1.5 million increased 19%, with a 7% inventory increase for properties priced over $1.5 million.
For Simi Valley/Moorpark, Inventory is down 45 % compared to last year, the number of sales were up 2%, and months worth of inventory declined from 2.7 months to only 1.2 months, almost no inventory at all. The time a property was on the market dropped from 9 weeks last year to only 7 weeks this year. That has pushed Median prices up 7%, and average prices up 10%. For properties priced below $750,000, Simi/Moorpark only shows 2.5 weeks worth of inventory.
Sales numbers for properties priced below $750,000 increased 11%. Sales of properties priced between $750,000 and $1 million increased 73%. The vast majority of sold homes in Simi/Moorpark are in this range, with around 25 units sold over $1 million. However, prices are going up dramatically.
Let’s look at the inventory charts to visualize how things compare to previous years. This is the lowest beginning inventory in five years. With only one REO and one Short Sale, troubled properties remain minimal. 2018 was also a low inventory year, and the question was asked whether the low inventory caused the number of sales to diminish. This year we can ask that same question. And give the same answer. Yes.
For Simi Valley and Moorpark, inventory is almost non-existent. In 2019, we began with the highest inventory in the past five years. Inventory rose as expected until mid-year, and then began a mid-year slide to finish 50% lower than it started out. 2020 is showing no growth at all, with the group of homes listed below $750,000 very minimal, with only 62 homes in that category today.
For sales in the Conejo Valley, even though inventory was falling dramatically, sales still rose by 2% from the previous 3-month period.
For Simi Valley and Moorpark, sales are comparable to last year. With lower inventory and higher sales, prices should rise.
The chart below shows pricing over the past seven years. The distance between the average and median lines are indicative of the percentage of higher priced homes, the bigger the space the more higher priced homes have had an influence.
For Simi Moorpark, where the majority of homes are in the median priced category, the spacing between the two lines is not nearly as great. For the past six months, median prices in Simi were flatlined. But at the beginning of 2019, median prices dropped. Comparing the lower prices in 2019 to the prices in 2020, prices have recovered strongly.
I have added the two charts below to help compare how this year is starting out compared to the past years. The lines represent the total number of closed sales over the year. Both Conejo and Simi/Moorpark are beginning this year at the lower end of experienced sales.
And finally, let’s compare the total number of sales for each of the past few years. Are sales increasing or decreasing in total? For Conejo, the past four years have seen total sales decline, but sales of homes priced between $1-2 million are increasing.
For Simi Moorpark, sales have been pretty consistent, and rose last year thanks in part to the price points and in part to the availability of inventory in the beginning part of the year.
This year will be a year of challenges, and outside influences. The election, coronavirus, huge drop in the Dow Jones average, huge drop in interest rates which has kept mortgage rates extremely attractive, all these add up to a very interesting year, and here it is only March. I hesitate to make a prediction on business levels or pricing because so much is happening. Work hard and you will continue to get your portion of the available sales.
Have a wonderfully successful year.
Chuck