It’s tough being a Conejo Valley (Westlake Village, Agoura Hills, Thousand Oaks, Oak Park, Newbury Park) home buyer today. Prices are climbing, interest rates are rising, and homeowners are staying.
If you’ve been following my Monthly Market Update over the last few years, you know I’ve been complaining about the drop of inventory of available homes. Each month it drops, we think it can’t get much less, and then the next month it drops more.
|Homes for Sale||788||690||655|
* Total homes for sale at the end of October for each year
Why aren’t people moving, you may ask? There are many reasons, but here are the most common.
- The Conejo Valley is in high demand and few who live here move away unless they have to.
- We’re not building any new large tracts of homes. Yes, we have little developments that pop up here and there, but no large developments that would have a significant impact.
- Many homeowners who would like to move up to another Conejo Valley home decide to stay because they are concerned they will have a difficult time finding a suitable house once their current home sells.
- Others stay because: A) They have a lower interest rate on their current home than they could get today. B) They don’t want their property taxes to go up. C) They couldn’t qualify for a new mortgage today. D) All of the above.
As a result, many homeowners decide to remodel and stay where they are which is keeping our inventory low.
If You Think Today is Challenging, Be Happy It’s Not 2013
As tough as it may seem, it’s actually been much tougher. 2013 was one of the most challenging years for buyers that I can remember. There were 441 homes for sale at the end of February 2013 vs. 579 today. No one was selling. And not just for the reasons people aren’t selling today. In 2013 many people couldn’t sell even if they wanted to because they had no equity and couldn’t qualify as a short sale.
To make matters worse, investors saturated the market. And not just individuals but major corporations like Blackstone. These were all cash, quick-to-close buyers. Try competing with that as a 20% down buyer, or even worse, an FHA buyer. No chance. So maybe things aren’t quite as tough as they seem.
If you’re having difficulty finding a home or getting your offer accepted, it may have to do with who you are working with. Who you choose to represent you really does matter especially in a seller’s market. For the most part, agents have access to the same information online, but you need an agent who is plugged into the local vibe. It’s a boots-on-the-ground market. Just by being out and about, showing homes and talking to agents, a good and active agent can get the inside scoop before it goes public.
And it’s not just about finding a home before it hits the market. Chances are most sellers are going to want to test the open market no matter what, but it’s the relationship with the other agent that is crucial. A common misconception is that in a multiple offer situation, the home goes to the highest bidder. That’s definitely not always the case. The seller (and their agent) wants to make sure the escrow will actually close and that the buyer’s agent can be trusted and has a good reputation.
The Conejo Valley is a small town and the active agents look out for each other. When I’m representing a buyer and competing against other offers, I often have an advantage because of the relationship I have with the listing agent. If you’re being represented by an out of area agent or someone who doesn’t do a lot of business, you’ll be at a distinct disadvantage. That’s just reality.
When is the Inventory Coming?
I wish I knew! We’ll have our usual spring boost of homes that will last through June. But the chances of seeing a substantial jump in listings in the near term are slim.
The best thing you can do is get your ducks in a row and be ready to act. 1) Have a solid pre-approval in place with a reputable lender. 2) Make sure your proof of down payment is easily verifiable. 3) Select an agent who’s active in the area with positive reviews. 4) Be ready to get creative with your offer (it’s not all about price). 5) Be mentally prepared to act quickly and decisively. (Read: How To Win When Competing Against Other Offers)
Take these steps and you’ll be way ahead of the competition when your dream home hits the market.