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July Takes Sizzle Out of Home Sales

Ventura County prices plateau after a steady surge. Properties changing hands drop 16% from the same month last year.

August 19, 2004|Daryl Kelley | Times Staff Writer

After an unprecedented surge, home prices in Ventura County leveled off at $502,000 in July as sales plummeted 16% and home sellers flooded the market, according to new data and real estate experts.

After a year in which the median price of a Ventura County house or condo rose about $100,000, home prices inched up just $2,000 last month, DataQuick Information Systems reported Wednesday.

At the same time, home sales fell to 1,281, down from 1,466 in June and 1,527 the previous July. That makes this July one of the two slowest since the statewide recession broke in 1998.

The real estate market is at a plateau, agents said, because prices are so high, the supply of homes is up dramatically and mortgage interest rates are up slightly. The bidding wars of the spring are long gone, they said, and it's taking much longer for homes to sell.

"Either this is just a temporary lull in the market or the market is beginning a significant downturn in both sales and prices," said DataQuick analyst John Karevoll. "I just can't say which right now."

What Karevoll can say is that home buyers are stretching their budgets to afford inflated housing prices.

Twice as many Ventura County purchasers are using riskier variable loans -- with lower rates and payments in the short term, but potentially much higher ones in the future -- to buy their homes than did a year ago. Variable and hybrid loans are up from 37% of the total to 74%, he said.

Generally, DataQuick's July numbers reflect sales completed on escrows opened in May and June. But analysts said the same moderating trend has continued through July and August.

Buyers have become reluctant to purchase, said analyst Helen Barella, of the Coastal Assn. of Realtors, which covers western Ventura County.

Homes that typically sold in six to eight days in March now stay on the market for 32 days, while the inventory of houses and condos has ballooned from 297 to 1,300, she said.

So agents said they have begun to tell home sellers to drop their prices.

"The bottom line is I'm going back to my clients and saying, 'Hey, listen. This is the truth: If you want to sell your house, you've got to get the price down,' " said Fred Evans, a top-selling broker in Ventura. "I've been doing this for 20 years, and you can't buck the trends."

Evans said the trends were dramatic.

His Remax office sold as many homes during the first half of 2004 as it did in the same period the year before. "But what's in the pipeline right now is dramatically less than last year," he said. "You're going to see even lower numbers for August and September."

Meanwhile, many homeowners have decided this is the time to cash in, he said. "For example, on the hillside in Ventura, there are 31 properties for sale, double what there were a month ago. That's when it peaked and everybody thought we'd better get our house on the market."

The story is much the same in the east county, said Peter Greer, immediate past president of the Conejo Valley Assn. of Realtors. "Obviously, it's leveling off," he said. "We're telling sellers not to be so optimistic, to price their home for what their neighbor's sold for, not higher."

Greer, who is chairman of the association's multiple-listing service, said the time it takes to sell a house has increased from 11 days to more than 40 in recent months.

"I did the numbers, and the market peaked in April," he said.

For example, in upscale Moorpark, there were only 29 houses for sale in May, but 149 today, Greer said.

Home sales declined sharply in almost every local city from July 2003 to last month, DataQuick reported.

They were off 16% in Simi Valley, 18% in Moorpark, 27% in Oxnard, 36% in Thousand Oaks, 42% in Camarillo and 62% in Fillmore.

"I've always thought we needed this leveling off," Greer said. "It's healthy, especially for our first-time buyers. We're always asking, 'With these prices, where will our children live in the future?' "

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(BEGIN TEXT OF INFOBOX)

Sales since 1988

July figures for home sales in Ventura County since 1988, with median prices and number of sales.

*--* Year Number sold Median price 1988 1,794 $188,000

1989 1,026 232,000

1990 798 217,000

1991 902 216,000

1992 842 208,000

1993 817 198,000

1994 909 191,000

1995 692 186,000

1996 909 193,000

1997 1,101 202,000

1998 1,662 224,000

1999 1,577 230,000

2000 1,213 254,000

2001 1,576 275,000

2002 1,621 331,000

2003 1,527 403,000

2004 1,281 502,000

*--*

Source: DataQuick Information Systems

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