The Real Estate market has been stagnant and operating at a lower-than-average level for going on three years. That includes our local market, California, and the USA.
Below is a continuation of the bad news. From AP.
LOS ANGELES (AP) — The latest evidence that homeownership is becoming increasingly less accessible to many Americans: Sales of previously occupied U.S. homes fell last year to a nearly 30-year low for the second time in as many years.
Elevated mortgage rates, a years-long shortage of homes on the market, and record-high home prices continued to stymie prospective home shoppers, especially first-time buyers.
That led existing home sales to fall 0.7% last year to 4.06 million — the weakest showing for home sales since 1995 and edging out the terrible year for sales in 2023, the National Association of Realtors said Friday.
Even in the midst of a sales slump, a dearth of homes on the market and rising mortgage rates gave sellers an edge over buyers, helping drive up the national median home price for all of last year to an all-time high $407,500, an increase of 4.7% from a year earlier.
No change is expected for the country as a whole.
Now the good news, from CNBC:
- Amgen said it will spend more than $600 million to build a new research and development facility at its headquarters in Thousand Oaks, California.
- Amgen said construction of the facility will begin in the third quarter of this year and will create hundreds of U.S. jobs.
ALL REAL ESTATE IS LOCAL
And local is looking up. We live in a high-priced area. We have wonderful weather, good schools, an enviable lifestyle, and the largest employer in our area is about to spend $600 million to build a research facility that will create hundreds of jobs, good quality jobs. Jobs that can afford our high home prices.
High prices and high mortgage interest rates have combined to make our areas unaffordable to many. Interest rates appear to finally be coming down, and our LOCAL ECONOMY is about to get a large boost.
Let’s see how the housing market has been doing prior to this announcement.
Inventory has been climbing, although sales have been stagnant, comparable to the last two years. Median prices have come down a little compared to the same three months last year, Average prices have decreased a little more. Looking at the bottom half of the table, we can see that our run of high priced homes appears to have come to an end. High priced homes have propped up our local market and kept inventory from growing, but no longer. Nothing lasts forever. We are now at a point where inventory represents three months of sales, what I call a balanced market, favoring neither buyer or seller.
Simi Valley and Moorpark did not have as strong a percentage of highest priced homes, many bought with all cash. Sales of their more affordable homes, usually involving mortgages, have languished as prices shot up and interest rates rose. A shortage of Simi/Moorpark inventory has been a persistent problem, and now that low inventory has grown by 81%. This inventory represents three months of current sales, and like Conejo is balanced, favoring neither side, equal power for buyer and seller.
Diving deeper, we can see current inventory is more than twice what was available during the past four years. Our inventory is now behaving much like 2018 and 2019, the pre-COVID years, while 2021 – 2024 experienced low inventory availability.
For Simi/Moorpark, the same pattern exists, with current inventory more than triple the inventory two years ago, and still climbing.
Listings add to the inventory, while sales deduct from inventory. Sales figures for Conejo are consistent with the last two years, with 150 homes sold per month compared to the long term average of almost 250 homes.
Comparing how this year will compare to previous years, both Conejo and Simi/Moorpark are practically duplicates of 2023 and 2024. Thanks to the highest priced homes with stronger sales, 2025 Conejo numbers are currently a little above the past two very slow years.
For Simi/Moorpark, sales continue to mimic the past two years, although most recent sales levels will show that line catching up. But nothing to brag about.
Prices have been on a strong climb, but appear to be finally dropping off. Pricing and sales both follow a pattern of being stronger heading into summer and weaker heading into winter. The chart below shows the stability of median pricing while average prices have dropped, an indication of the recent softness in sales of highest price homes. The difference between the red and blue lines shows this narrowing.
For Simi/Moorpark, pricing has been less apt to follow the summer strength and winter weakness. Prices in Simi/Moorpark have not risen with the strength visible in Conejo, and the average price is closer to the State average price.
My analysis generally follows past history as an indication of what the future holds. Prices and sales volume indicate the market will continue onwards with little change. But changing factors such as a decrease in interest rates and that AMGEN announcement now give me more confidence in the future.
Unfortunately, interest rates dropping will be dependent on unemployment numbers. the good news/bad news from the FED. People with jobs will find it more affordable to buy a home, as long as they still have jobs. A weak recession may be in our immediate future. Tariffs are the unknown factor. If they continue, inflation will rise and the FED will be hesitant to cut rates in the face of rising inflation. A lot will depend on both the White House and developing court cases limiting the ability of the White House to force tariffs. That battle is important to watch.
For our areas, I think our market will be looking better than most of the rest of the country.
While these numbers are important averages, remember what your neighbors and clients are most interested in, the value of their home. Drill down and give them that information in order to remain their trusted real estate market advisor.
Remember, ALL REAL ESTATE IS LOCAL.
And stay careful out there.
Chuck