Real estate head forecasts slight thaw

Keith Myers As homeowners and homebuyers in Southern California, including those in the local markets, continue to cope with struggling residential sales, Acorn managing editor John Loesing begins a multipart questionandanswer series with local real estate leaders about the future of the market and possible signs that the worst might be behind us.

He begins his discussion with Keith Myers, president and coowner of RE/MAX Olson & Associates. Myers, who is based in Westlake Village, has been a licensed broker since 1984, and his company now comprises six offices and 285 agents in the Simi, Conejo and San Fernando valleys.

Q: Let's begin by distinguishing between residential and commercial real estate. Is the shopping center and industrial market, for example, feeling the same downward pressure that has plagued the residential side?

A: First of all, in times past, real estate trends and cycles have been regionally driven. This downturn has been nationwide. It's a systemic problem caused by many factors. Commercial real estate, specifically retail and industrial, was not affected by the same factors, so it continued to perform well.

However, the residential real estate problems led to job losses, lower spending, etc., which has now spilled over into the commercial markets, causing vacancies, lower demand, reductions in rents and values. It's the marketplace at work, and it may not be all bad. These challenges create affordability and opportunity for buyers and tenants of both residential and commercial properties.

Q: According to DataQuick, the median price of homes sold in Ventura County rose $14,000 in April, to $340,000, the first monthtomonth gain in over a year. And the National Association of Realtors says April home sales were up 3 percent nationwide. Are home prices at the bottom and starting to creep up?

A: In my estimation, we made a bottom in local residential prices in February or March. Particularly in the San Fernando Valley and Oxnard, which fell further and faster than the Conejo Valley. Demand now exceeds supply up to $600,000, and in many cases even higher. The luxury market remains soft, although it shows some good signs, too. We are not totally out of the woods and poised to return to a rapidly appreciating market, though, for two main reasons.

First, the overall economy remains soft. Unemployment has not yet bottomed. Second, there is a huge pipeline of distressed properties that must be addressed. Fortunately, lower prices created stronger demand, so we can absorb some growth in supply.

However, don't be surprised if we revisit the price bottom later this year. Still, it's a great time to buy.

Q: Agents on the street have told me they notice an uptick in activity. Do your figures bear this out?

A: Activity is almost frenetic, really. We have had 10, 20, even 70 offers on some of our bank-owned listings. I've never seen anything like it in my 25 years. Good interest rates and lower prices make this opportunity time for buyers.

Q: As the corrections continue, are we seeing the local sub-markets behave differently than elsewhere in Southern California? When it comes, will the turnaround in our area be quicker or slower?

A: The areas that fell first and farthest are recovering now. Those include the Antelope Valley, Inland Empire and even Santa Clarita. That's because prices went from around $500,000 to $140,000, so it's relative. We didn't see prices drop that far, so they won't bounce back quite as fast. High demand areas like the Conejo Valley historically perform better, and I expect that to be the case going forward.

Q: The beginning of the real estate recession had its roots in the subprime lending mess. Today, isn't it more about the unemployment picture and the inability of potential homebuyers to leverage their equity?

A: That's right, and that's one reason why the Conejo Valley has had fewer foreclosures and performed better than most areas. Our buyers did less of these types of loans. They actually put money down.

Q: Have sellers learned to be realistic with their expectations, or do you see bid and ask prices as still being too far apart?

A: Sellers have become more realistic. But so have buyers. It's a good time to be both if you have equity.

Q: What price range is giving sellers the best results?

A: Single-family homes under $500,000 are hot right now if priced right. Our agents have multiple offers in most cases.

Q: What percentage of the activity are short sales and foreclosures? Are they starting to slow down?

A: The percentages of distressed properties (REOs and short sales) have gone down for the reasons I mentioned, but it still is over 70 percent in some areas of the San Fernando Valley and Oxnard. Most of our area is under 25 percent.