Focus On Mission Hills

This week, I want to shine the spotlight on Mission Hills and take a look at how the market has been doing up there. In case you aren't familiar with the area, Mission Hills is a pretty homogeneous neighborhood in terms of the homes. The homes up there were all built within a few years of each other during a boom time in the Lompoc Valley's history. In the late 50's and early 60's, Vandenberg AFB was ramping up its space launch mission, and the population in our area exploded. A lot of the housing in the central parts of the city and in Vandenberg Village was built during this period to fill the housing need, and Mission Hills was another part of that boom, built to fill a need for workforce housing.

Our MLS divides this area into Upper and Lower Mission Hills. To look at a map, it's kind of counter intuitive - Upper Mission Hills is the south side and Upper is the north side, separated by Burton Mesa Boulevard. The homes in Upper Mission Hills tend to be a little bigger, but none of the homes up there were built big. Some homes have had some additions done, but the stock floor plans vary from around 900 square feet up to about 1270 square feet. They are mostly 3 bedroom, 1.5 bath homes, but there are some 4 bedrooms homes, and the odd 5 bedroom (always something with an addition of some nature).

The area tends to be a real mixed bag for condition of the homes. Some areas have pockets of really well maintained homes showing pride of ownership, but there are also areas that have several homes that look sadly neglected. I had some hopes when the market and economy was better that we would start to see more of the former as values came up and owners had more money to put into their homes. I still have some hopes that this will happen in the future. One of the things that the area has going for it is a very nice rural feel and easy access to La Purisima Mission and its hiking trails. In fact, there are several homes that back up to Mission property. Another good point for the area is school district. I don't want to open a can of worms here, but we've had several clients tell us that they absolutely want to be in the Cabrillo High School district, and this is the most affordable entry into that district.

Like most of the rest of our market, we're light on inventory up there right now. We only have 3 active and 4 contingent homes on the market in our MLS today. Of those, only 1 is neither a short sale or REO. There is only one pending unit there at the moment, an REO home. We've seen 5 sold units in the past three months, 4 of which were REO's (the other was a traditional seller). The REO bug bit this area incredibly hard in 2008. 21 of the 28 sales there last year were REO's. Interestingly, we only had one closed short sale in the area.

As you might expect from the level of REO activity and the age and condition of the homes, this area has taken a slightly bigger hit than the market as a whole in terms of value. Looking at the sold units, it looks like Mission Hills homes lost somewhere in the neighborhood of 30% of value over the last year (vs. 27% for the entire market), and around 50-55% from the peak (vs. 48%).

I would expect that due to the age of the homes here and the overall condition of the neighborhood, we'll probably see this area get price recovery after the rest of the market. As long as newer homes are affordable, they'll get first preference from most buyers. But when we start to see prices creep up in other segments and people have to stretch more to get into them, these homes will eventually follow suit.