County most expensive housing market in nation, forecast warns

Ventura County’s housing availability remains at a critically low level, experts said at this year’s Cal Lutheran University’s Center for Economic Research and Forecasting event in Thousand Oaks, and because of ongoing and persistent barriers to new construction, any hope for expanding the county’s home ownership rate appears dim.

The Feb. 28 forecast at T.O.’s Scherr Forum Theatre featured the yearly economic findings of CERF executive director Matthew Fienup and his team from Cal Lutheran, and a keynote address from David Bahnsen, economist, portfolio manager and founder of the Bahnsen Group.

Ventura County’s new housing permits have trailed the national average since 1990, the forecast said, and although they rebounded in the years following the 2008 home mortgage crisis, the per capita permits have once again reached historic lows compared to the new homes being afforded to the rest of the country.

Fienup says purchases aren’t being restricted by high interest rates, but rather low supply.

“Interest rates are not a dominant issue in the Ventura County housing market. Supply trumps all other issues,” he said.

“The extremely low level of new construction since the early 2000s has created a shortage of 30,000 or more units. Without an obsessive focus on new housing, the county will not be able to make a dent in the affordability crisis that is driving individuals, households, and jobs from the county,” Fienup said.

The CERF forecast said the 25-year-old SOAR (Save Open Space and Agricultural Resources) policy of imposing strict growth boundaries around the cities of Thousand Oaks, Simi Valley, Moorpark and Camarillo has been a key inhibitor.

“Ventura County has the most stringent land use policies of any county in the United States,” CERF’s director of economics Dan Hamilton said in his February economic report.

SOAR and other market forces have put the county’s average single-family home price of $882,500 out of reach for most buyers,” Hamilton said. Only 13% of Ventura County households can afford the median priced home, he said. The national median is only $387,000.

The National Association of Realtors reports Ventura County is now the single most unaffordable metropolitan area in the country.

“This will continue to be a significant drag on economic growth, causing Ventura County to lag further behind its neighbors, the state of California, and the nation,” Fienup said.

As supply lags, prices move higher.

CERF’s Ventura County forecast calls for continued home price appreciation, with an overall 16.5 % price rise from 2023 to 2026 (down from the 24.7 % increase that occurred from 2020 to 2023).

“ While restricted supply and Ventura County’s pleasant climate and abundant environmental amenities provide support for appreciation, economic malaise (a relatively larger effect) and mortgage rates (a relatively smaller effect) subtract from home price appreciation,” Hamilton said.

Speaking via video, 35-year-old firefighter and former Simi Valley resident Travis Knabe told conference attendees that he chose to move from Ventura County to New Braunfels, Texas two years ago to build a better life for his family.

“Double the size home for half the price,” Knabe said. “It’s just not attainable in California.”

Rents, a key contributor to inflation, are also marching higher, the forecast said.

The average Ventura County apartment rent has increased every year from just under $1,400 in 2009 to almost $2,600 last year. Nice apartments in the Conejo Valley are much higher than that.

The salary needed to afford the average rent is $154,000 a year, yet only three out of 23 employment sectors in the county offer that kind of paycheck, according to CERF.

Hamilton points toward the need for clearer guidelines and less red tape in real estate development, plus an “aggressive policy of green-lighting in-fill development, especially multifamily housing along transportation corridors.”

In his talk titled “The Case for Growth” at last week’s forecast, Bahnsen said economic growth can cure many evils, but not if that growth continues to come in the form of government spending. Just under 11% of U.S. gross domestic product after World War II was attributed to government spending; today it’s almost 25%.

But, Bahnsen said, “Corporate profits have grown a great deal, so what exactly is the problem?”

He called it a “glass is half-empty, glass is half-full economy” in which some economic metrics are good while others are bad.

Bahnsen said distorted monetary policy such as years and years of zero percent interest rates have sent today’s housing prices to a level “where nobody can afford to buy one.”

“What has slowed economic growth is production. . . . We must bring back housing supply.”

“We must celebrate entrepreneurialism and risk-taking and ultimately allow these things to lead to the private sector growth that is available to us if we will have it,” the economist said.

“My point economically is to say that the need of the hour is a culture of work and a policy framework of growth.”