Surf & Sales Up in Ventura County

In the last week of March 2012, the California Division of Land Advisors Organization closed the final portion of “The Bungalows at Beach House,” located in Port Hueneme, Ventura County.  The Ventura County Team (Richard Byrd, Randy Coe and Michel Faris) represented the buyer and the seller in the sale of 29 “near finished” lots in the former John Laing Homes community.

The Bungalows at Beach House originally consisted of 64 lots of which 35 have already been built and sold. The 29 subject 4,000 – 5,000 square foot lots sold to Standard Pacific Homes; the seller was a court appointed receiver.

The Port Hueneme deal was a significant transaction in a wave of SEVEN land transactions that the California Division closed in the last week of the first quarter.  The number of transactions rushing to the finish line at the end of the first quarter may signal a broad-based upturn in the California land market, and the diverse characteristics and widespread geographic reach are exemplary of the California Division’s extensive residential land expertise.

“Improved lots are extremely scarce in many markets throughout California,” said Tom Reimers, the California Division’s President.  “The relative success of the spring selling season has caused homebuilders’ supply of buildable lots to dwindle, and is pushing the builders back into the land market for replacement lots.”

VCStar.com reported: In Ventura County, 820 single-family homes and condos were sold in March, compared with 757 in March 2011, an increase of 8.3 percent. In February this year, 606 homes were sold. In January, 561 homes were sold.  The median price for a home sold in Ventura County in March was $350,000, compared with $349,000 in March 2011. READ MORE

Source: Richard Byrd, Senior Marketing Consultant (626) 376-9840 ext. 13; and Michel Faris, Marketing Consultant (949) 852-8288 ext. 14.

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Slow as Molasses in Ventura County

Land development activity is still slow and sticky in Ventura County, as very few land deals have traded hands in the coastal county in recent months.  Landed shared back on September 29th that home buyers are drawn to the region’s beachside lifestyle, but the County’s restrictions on new developments create a very supply constrained and difficult development environment for homebuilders.

In a recent article for HometownStation.com, a representative from the Los Angeles/Ventura Chapter of the Building Industry Association of Southern California said, “The weakness in single-family construction, which historically has been more consistent than multifamily projects, is further proof that local governments need to work more closely with homebuilders to allow projects to pencil out.”   

The same article reported that 458 multi-family units and only 116 single-family homes were permitted in Ventura County during the first nine months of 2011.

Eighteen single-family home permits were issued in Ventura County in September, compared with two in August and 14 in September 2010. Those homes are being built in Fillmore, Oxnard, Ventura, Simi Valley and unincorporated areas.  Oxnard leads Ventura County in housing starts with 337 year to date, which is by far the most in the County. 

Lenders served 1,535 notices of default in the third quarter in Ventura County, slightly down from the same period last year but up 35.3% from the second quarter.  669 homeowners in the County lost their houses or condominiums in the past three months.

A total of 772 new, condominium and resale homes were sold in Ventura County in September, at a median price of $349,000. This price is down from $355,000 in August.

Source: Michel Faris, Marketing Consultant, (949) 852-8288 x14

New Conforming Loan Limits Create Uncertainty in California’s Bay Area

Uncertainty remains high in the Bay Area residential land market following the drop in conforming loan limits to $625,000 from $729,000.

The Bay Area has 72 sub-markets (by Zip Code) where the median home price is now above the new conforming loan limit. What affect this will have on the recovery of the Bay Area housing market is still unknown. Chances are that the compression in loan limits will ultimately correlate to a compression in home prices although not necessarily on a dollar for dollar basis, and the affects could be widely different based on sub-markets.

Currently true “jumbo” loans are priced approximately 100 basis points above “jumbo conforming” loans. Assuming a $626,000 loan and jumbo rate of 5%, a potential home buyer keeping their monthly payment the same will lose approximately $150,000 in buying power.

This phenomenon is most likely to affect the market in the $800,000 – $1 million price point range.  The buyers of these homes would have formerly qualified for a “conforming jumbo” loan if they were putting down at least 20%.  However, they now will need a much larger down payment to stay under the new conforming limits.

At price points above $1 million we would expect there to be a smaller impact, as buyers in that price point have always had to get jumbo loans or put down substantial down payments.

Click the link to see a table outlining the Bay Area sub-markets by zip code with median prices above $625,000: http://www.dqnews.com/Charts/Monthly-Charts/SF-Chronicle-Charts/ZIPSFC.aspx

Source: Steve Reilly, Marketing Consultant, (925) 368-3128