2019 Year in Review | Conejo Valley
2019 did not get off to a roaring start. At the beginning of the year, prices dropped slightly, inventory began to build up, and rates were at about 4.75% and expected to keep rising. Then around March, rates began to drop and things started to change. Not change as in multiple offers and bidding wars on every home, but change as in prices moved up and supply went down albeit at a more reasonable pace.
The rest of the year was a bit of a tug of war between buyers and sellers. Little competition from other homes had sellers believing they could name their price. And lower overall demand for houses had buyers believe that sellers needed to be more negotiable on price. And that’s how the year ended – a somewhat balanced market between buyers and sellers.
In spite of the slowdown, home prices finished the year with a bang. The median price of a Conejo Valley home (Westlake Village, Agoura Hills, Oak Park, Thousand Oaks, and Newbury Park) ended the year at $837,500 up 12% from $745,000 in 2019. Interest rates ended the year at about 3.7% down from about 4.5% last year.
What to Expect for 2020 | Home Buyers
Understand that your buying strategy will vary based on your price point and specific neighborhood. Some neighborhoods are in high demand and may only have a few listings over the year – be ready to pounce when one comes up. Other neighborhoods have built up inventory and a steady supply of new listings throughout the year – be prepared to negotiate.
At the lower end of the price spectrum (900k and below), move-in ready homes will continue to get the most interest and sell relatively quickly. Homes over $1 million take longer to sell and are often more negotiable. Especially if updating is needed.
Overall, the expectation is for home prices to continue up in the Conejo Valley although slightly less than years past. Mortgage rates under 4% with more negotiable sellers in an appreciating market is a favorable recipe for those looking to buy in 2020.
If you are looking for a home, here’s a great place to start: Conejo Valley Neighborhood Tours.
Conforming Loan Limits 2020: L.A. County $765,000, Ventura County $713,000
What to Expect for 2020 | Home Sellers
Is it a buyers market? Is it a sellers market? It depends on your neighborhood. Some neighborhoods have buyers waiting on the sidelines for a home to come up and others simply don’t. Sellers need to be aware of which neighborhood they’re in.
However, even in high demand neighborhoods, properly pricing the home is more critical than years past. Buyers are more educated about the market and more cautious about overpaying.
Price it right! The “testing the market” strategy is too risky and costing sellers thousands of dollars (more time on the market = lower sales price). Plenty of homes in popular neighborhoods sat on the market in 2019 because sellers were simply asking too much.
Sellers will need to work harder to stand out in 2020. According to the California Association of Realtors, “the HGTV effect is real. Buyer expectations are high, especially for Millennials. Stage everything”.
It’s still a good time to sell your home as the demand for the Conejo Valley lifestyle and excellent schools remains strong and the market is expected to appreciate in value (+2.5% in 2020). The importance of experienced representation and guidance will be crucial in 2020 to help navigate the challenges ahead. Buyers are still out there, they’re a little more cautions these days and will have stronger negotiating power.
Read my blogs for sellers to help you prepare: Tips for Selling a Home
Diving Deeper | Moving into 2020
The California Association of Realtors (C.A.R.) released its 2020 housing forecast.
Median home prices are expected to increase 2.5% in 2020 after about a 4.1% increase in 2019 and interest rates are expected to remain steady at 3.7%.
Last year, C.A.R. forecast an increase in median prices of 3.1% versus 4.1% (projected) in 2019 and interest rates were expected to climb to 5.2% but are currently closer to 3.7%.
Strong Economy Going into 2020: Unemployment is at its lowest in 50 years, consumer confidence remains high, and inflation remains relatively low.
(See: Current Local home prices)
Why Are There So Few Homes For Sale?
Blame it on the boomers? Yes…partially. Boomers own a lot of homes. The expectation was that many would look to downsize in retirement freeing up the bigger homes for younger generations. That hasn’t happened. In fact most tend to remodel and stay put. On average, Boomers sell every 15 years vs 8 years for Gen X and 4 years for Millennials. For the most part, the Conejo Valley is built out with very few new homes being built only adding to the shortage issue. Low inventory will continue to be an issue going forward in 2020.
Is a Recession Coming?
There’s been a lot of recession talk out there which can bring up bad memories of 2008. Here’s a little known fact: Recession does not equal housing crash. In fact during 3 out of the last 5 recessions, home prices went up.
In 2008, the housing market was the cause of the recession. That’s unlikely to be the case next time.
Read my blog: How Will A Recession Impact the Local Real Estate Market
The Bottom Line
2020 should look a lot like 2019. And 2019 was a good year for both buyers and sellers – Demand was steady, interest rates dropped, and prices went up.
All real estate is local. What’s happening in the state is not always reflected in the Conejo Valley. Pulling from multiple resources including industry professionals, economists and my own observations in the marketplace, I expect the Conejo Valley housing market to continue to tip slightly towards sellers as demand remains strong from local buyers and those relocating from out of state.