Ventura County Up - Median Price Point is $569,000n

I am interrupting my four part series on finding bargains in an overheated market to publish a quick note about Ventura county which experienced double digit gains to have the median price point come up to $569,000. This should slow growth as not as many people can afford the new median price point.

"For several straight months we have seen more inventory hit the market than leave. For example at today's writing there are 43 new listings while only 33 have gone sale pending and been placed into escrow. What this has done has been able to give buyers more homes from which to select and consequently give them slightly more time in which to make their decision. This as opposed to the same market last year where if you didn't make an offer on the house prior to walking back to your real estate agent's car, meant that you probably lost out on purchasing your first choice. Our market was very strong up until the beginning of the holidays last year where it historically slows a bit"

We saw a similar pattern with an increase of ARM loan products being used in the late 1980's prior to the collapse of the real estate market. However this cycle is a little different. For one this is the biggest boom market in history. While most cycles run approximately seven years we are already into our ninth year of terrific appreciation and sales. The bottom line is affordability once buyers realize that they can no longer afford the larger house payments they will hold off on their next home purchase. This will lead to a glut in the inventory, longer marketing times on fewer sales and inevitably lower home prices. Because of the strong economy and the creative lending programs, buyer's payments have remained relatively within affordability limits being only about five percent below their 1989 peaks. This is what is giving us, up to now, a "soft landing" instead of a sudden drop in prices. However once we hit the runway only time will tell what will happen next."

I love this. This run up has been nine years in length so the expect a soft landing instead of a hard landing. No one can tell. Given how frothy the market is in Ventura, I think we can expect a relatively hard landing. Please note this article is by a real estate agent.

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