Realtor expects market recovery to begin in 2013
News Review Staff Writer
“In my 33 years in the real estate business, I have never seen a better time to buy,” said Kathy Vejtasa, owner of Coldwell Banker Best Realty.
She said that after considering market trends and the ultra-low interest rate of 3.35 percent, “I think our housing market is going to make a good recovery. And I think that’s going to happen for us this year.”
Vejtasa pointed to several factors on the state and national scene that have impacted the market, but said that the biggest effects are locally driven.
When China Lake was designated for BRAC gains in 2005, the market spiked in anticipation of being flooded with new buyers. Prices continued to climb and propertyowners enjoyed a seller’s market for more than a year.
Although the number of new billets, new residents and new homeowners is a topic ripe for debate, actual buyers never materialized in the numbers anticipated. And when the housing market crashed on the national scene, Ridgecrest home values plummeted along with the rest.
Vejtasa said that 2012 saw those prices bottom out. “So now we get to start the recovery process.”
One of the national factors that could have a positive impact is the potential for the feds to redefine rural housing. “The rural market is in flux, so that’s one thing they’re looking at.”
Although Ridgecrest’s 27,000-person population is just above the qualifying 25,000 or fewer, the isolation of the population makes it essentially rural.
“If we are reclassified as rural, that will qualify us for USDA loans — which would be a tremendous help in getting funding for housing and large projects,” said Vejtasa.
Ten cities across the countries are showing seeds of a housing shortage. Six of those cities are from California, which has dropped from third to fourth in leading the nation in foreclosures.
From August 2011 to August 2012, national housing prices increased 9 percent. “We haven’t seen that yet here, but we will. I think that’s going to happen in 2013.”
Another change that has positively impacted homeowners — if not housing prices — is removal of the requirement that homes must appraise for 105 percent of their values in order to qualify for a refinance.
Across the mountains Bakersfield is already well on that road to recovery. When the market crashed, Bakersfield saw more foreclosures than any other city in California. Now they are ranked third among the cities showing signs of a housing shortage.
Realtors and their clients are also feeling the effects of reform that grew out of the market collapse. In addition to the expectations placed on banks, a California HomeownerBill of Rights took effect Jan. 1 to offer an additional level of protection.
Federal Reserve Chair Ben Bernanke said he intended to keep interest rates low through 2013 to continue to aid recovery.
“When you look at all these indicators, some people are actually finding that it is cheaper to buy than to rent now,” said Vejtasa.
“I have always said that was the case when you consider the tax benefits, but there are residents who are paying $850 per month in rent who can get into a nicer home for $600 per month.”
The affordability of homeownership, when compared with the rental market, has also driven many to upgrade.
Vejtasa said that she compared the last quarter of the year (and the slowest time for realtors) from the high in 2006 to 2012. Average home prices in Ridgecrest fell 35 percent from $227,000 to $148,000 during that time period. Cost per square foot fell from about $138 per square foot to about $90 per square foot.
“That’s a drop for us, but there are cities who have seen a 60 percent drop in that same time period,” said Vejtasa.
After years of a buyer’s market, she said the market is really neutral right now. “But it’s only going to go up, which is why I’m telling people this is the time to buy.”
Mary Lundstrom, a realtor at Coldwell, said that another interesting figure is the inventory. “We have had between 160 and 168 homes on the market. Now we have 107. When that happens, prices go up and we see people start to build again.”
Vejtasa pointed out that since 11 percent of jobs are tied to homes, regenerating the building market will be a very important step in economic recovery.
“That’s not just counting the contractors. People also buy furniture and window treatments and hire landscapers and all the other things that come with owning a home.”
When the market crashed, most builders modified their services to repairs or renovations — or went into new industries. Today the building market is at a 50-year low.
Vejtasa also pointed out that homes are selling more quickly now.
What seems to be the prevailing sentiment among clients?
“You know, the only kind of negative sentiment I am sensing from buyers these days is a frustration that there’s not enough choice. There are a few people I can’t buy homes for,” said Lundstrom. “We’ve also been recently seeing multiple offers for one house. At one time we’d have been happy to get one.”
Vejtasa said that as the market starts a slow, but steady, growth, she would like to see other economic interests in the city band together to strategize on how to improve the local economy.
“We have more volunteerism in this town then any area I know,” said Vejtasa.
“I would really like to see the Ridgecrest Chamber of Commerce, the China Lake Museum Foundation, the China Lake Alliance and the Economic Development Corporation to come together and find ways to raise funds to support the base and bring more business to the community.”
She said that her office is interested in support Gary Charlon’s effort to beautiful the city. She said that bringing the Navy museum into town might help draw tourists, “which in turn fills up our hotels and our restaurants.
“Yes, we have China Lake, and the base has been named a Center of Excellence. But we can’t be complacent. We need to be proactive in beefing up our lobbying efforts in Washington, D.C., and be very astute in defending the purpose of the base,” said Vejtasa.
“I see a lot of potential for improvement in our local economy. But it will take all of us working together.”Story First Published: 2013-01-09