The Races Have Shut Down In California
The Press Enterprise reports from California. “Inland Southern California’s home sales last month were the worst in a decade in Riverside County and the worst on record in San Bernardino County. In June, Riverside County posted 3,359 home sales, down more than 47 percent from June 2006. San Bernardino County recorded 2,190 home sales, a drop of more than 50 percent. The slowing market took a toll on sales prices.”
“‘We have seen rising foreclosure activity through the year and no sign it is done climbing, and we are now seeing some real steep declines in prices. It is very difficult to say where bottom is,’ said Andrew LePage, analyst for DataQuick.”
“The move-up market has almost disappeared, which has cut demand for homes in the $400,000 to $700,000 price range, said Scott Chappell, a director of the Inland Valley Association of Realtors. He said as a result home prices in Riverside’s Orangecrest area have dropped 15 percent in the past 18 months.”
“Bill Santoro, broker owner of National Realty Group in Moreno Valley, described the market there as ‘almost in a free fall. Every time we move the price down to get ahead of the pack, the competition comes back just as fierce, dropping their price further.’”
The Union. “The number of defaulted properties in Nevada County has doubled in the past year, according to figures from the county recorder’s office.”
“The high rate of repossessed homes stems from a combination of a buyer’s frenzy several years ago, when buyers were willing to do anything to get into a home before prices rose beyond their reach, said Phil Ruble, president of Olympic Mortgage in Grass Valley.”
“‘You can’t make the payments,’ Ruble said. With prices falling in some markets, some homeowners now owe more than their house is worth. ‘So they just walk away,’ Ruble said.”
“Interest-only loans are tools to get some buyers into a home and have been used effectively by a number of people, said John Taber, a commercial and residential loan officer. Those who neglected to do their homework before they invested are the ones hurting now, Taber said.”
“‘If you take a chain saw out and don’t know how to use it, you’ll be without a hand,’ Taber said.”
The Orange County Register. “The median price for an Orange County home returned to record territory last month, but experts warned home sellers against popping champagne corks.”
“Sales were way down, making the month the slowest-selling June in two decades. Some said the record median home price likely is a distortion caused by the decline in sales and a lack of buyers for lower-priced homes.”
“It was the slowest June in the 20 years DataQuick has tracked the market, and it follows the worst May on their books as well.”
“‘It doesn’t mean the value of your house has gone up,’said housing consultant Richard Gollis. ‘We’ve eliminated people who couldn’t afford to be in the market. Those who can afford to be in the market are buying higher-priced product.’”
“Juliette Saunders of Fullerton and her husband have been unable to find an acceptable home in Orange County that they can afford. ‘There’s no way we can afford a house anywhere in Orange County,’ she said. ‘Say, I wanted a loan right now. The banks are freaking out and not giving them.’”
The LA Times. “In Los Angeles County alone, 3,000 sellers took their homes off the market from May to June, or about 7% of all sellers, according to real estate brokerage ZipRealty Inc. Many sellers are simply holding out, refusing to give up any perceived equity gain by reducing their asking price, said John Karevoll of DataQuick.”
“Regina Nadeau didn’t need the latest sales figures to tell her that the market is slow, she’s been trying to sell her Lake Forest condo for the last eight months. ‘I pray every day and have a sense of peace, otherwise I would be stressing out,’ she said.”
“Nadeau has cut her asking price twice since January, and is now seeking $318,000 for her one-bedroom place. But she says she’s reluctant to take it down any lower: ‘I don’t want to sell too cheaply.’”
“San Bernardino is reeling from the post-boom effects. In June, sales in the city fell by 57% and the median price dropped 16% to $246,000 from $290,000 a year earlier.”
“Ditto for Lancaster in the Antelope Valley, which like San Bernardino also attracted large numbers of first-time home buyers seeking affordable prices. There, sales plunged 62% in June and the median price declined 13% to $279,500 from $320,250, according to DataQuick.”
“‘Whenever you have a market that is receding, as Southern California is right now, it will recede more in the spillover markets,’ Karevoll said. ‘In the core areas, people will be much less affected than where there was a lot of building and risky lending.’”
The Ventura County Star. “The days of double-digit price and sales increases are gone, said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp. The housing market probably won’t recover until 2008 or early 2009, he said.”
“‘We’ve had the bubble, and now the bubble has slowly deflated,’ Kyser said.”
“In June, Ventura County’s median sales price for new and existing homes and condominiums was $582,000 in June, down 6.9 percent from $625,000 the previous year, DataQuick reported Tuesday.”
“Sales in Ventura County fell by 27.8 percent, from 1,227 a year ago to 886 in June. Monthly sales have not topped 1,000 since December 2006. In contrast, sales during the peak year of 2005 exceeded 1,000 every month, hitting a high of 1,913 in June.”
“Sales have fallen more than predicted, said Mats Olson, an economist with the UC Santa Barbara Economic Forecast Project. In February, he projected about a 15 percent increase to existing home sales in Ventura County, based on historical housing cycles. Instead, sales have declined even further.”
“Still, there is no reason to be alarmed, Olson said. ‘Granted, prices are down 6.9 percent from a year ago, but the month over month numbers are generally flat,’ he said.”
“‘When people ask, when are we going to be off to the races again?’ you have to say, the races have shut down,’ Kyser said.”
The Fresno Bee. “An overflowing and rambunctious crowd bid on 16 bank-owned houses in less than 45 minutes Tuesday at what was likely to be the first of a string of auctions to be held in Fresno.”
“Energized by rock music that set the tone, more than 200 people, some serious investors and many just curious, crowded into a room to watch Hudson & Marshall’s first auction in Fresno since 2001.”
“Some fetched prices so low that real estate agents in the audience wondered whether the lenders would wind up accepting them. Representatives of the lenders did not attend the auction, so the bidders won’t know for one or two days whether their offers will be accepted.”
“Nhung Nguyen, who submitted the winning bid on two Fresno houses, said she was surprised that the prices were so low. She bid $132,500 for a five-bedroom, two-bath house that was listed for sale at $184,900, and $155,000 for a three-bedroom, two-bath house that was listed for $199,900.”
“An almost 4,000-square-foot house on Alluvial Avenue previously listed for sale at $669,900 was auctioned off for $500,000.”
“‘It was my first auction,’ Nguyen said. ‘With so many people, I never thought I could get anything.’”
“Nguyen, a real estate agent, plans to rent the properties to tenants for about $1,200 per month.”
“Eric and Jane Wood traveled from Orange County to try to buy some investment property. Eric Wood bid on a four-bedroom, two-bath house on Millard Avenue, but was outbid. Wood said he didn’t want emotion to get the better of him.”
“That was also the advice of Daniel Slenders, a Chowchilla resident and a veteran of cattle auctions who had his eye on a house in Clovis and one in Madera, but didn’t get either. ‘You never get excited,’ he said. ‘There are more auctions coming up.’”