Forecast For California Buyers: Sunny Skies Ahead
The San Francisco Chronicle reports from California. “Bay Area home sales eroded further in June, with properties in less-expensive areas leading the way. Across the nine-county region, sales of houses and condos tumbled 26.5 percent from 10,830 in June 2006 to 7,964 last month, according to real estate information firm DataQuick.”
“Solano County…boasts the lowest median price in the Bay Area, at $475,000, down 11.7 percent from the same month last year. Sales also fell by the largest margin last month. A total of 453 properties changed hands, 41.4 percent fewer than the 773 in June 2006. ‘With rising inventory and more foreclosures, buyers see this and feel it pays to wait,’ DataQuick analyst Andrew LePage said. ‘A lot are stepping to the sidelines to watch it play out.”
“While homes are selling for multiple millions on Russian Hill or in Pacific Heights, the new inventory in the South of Market area could have a dampening effect.”
“‘South of Market, which was a sure bet for growth in the mid 1990s with Multimedia Gulch and all of the Internet companies and the new lofts being built there…that’s pretty much come to a standstill,’ said agent Gregg Lynn. ‘I have sellers there with unreasonable expectations, they’re living in two years ago.’”
The Mercury News. “While the Bay Area’s June home sales fell to their lowest level in 12 years, median prices continued to rise in the region’s costliest counties, masking problems, and falling home values, in the lower end of the market.”
“‘Right now we have a skew,’ said real estate broker Richard Calhoun of San Jose. Parts of the market’s high end are selling quickly and appreciating, while the lower end is generally experiencing slow sales and falling prices.”
“A three-bedroom house now for sale on Lean Avenue near Calero Park in Blossom Valley…is listed for $580,000. That’s about 7 percent less than the $625,000 price the owner paid for it in September 2005. The owner used a combination of a first and second mortgage to come up with the purchase price, according to public records. The home has been for sale since March.”
The Contra Costa Times. “‘With Solano County, the slowdown is a combination of heavy starter homes, at least for the Bay Area, and lender tightening criteria,’ LePage said. ‘Not that we think it’s a huge issue, but it doesn’t help.’”
“That sentiment was echoed by Larry Klapow, president of Coldwell Banker San Francisco Bay. ‘The pattern’s continuing,’ he said. ‘We’re selling lots of high-end homes, and sales aren’t doing too well on the lower end.’”
“Despite DataQuick’s findings, Brian Sharp, broker in Brentwood, said he’s seeing the opposite. ‘We’re hurting in the upper end,’ he said. ‘Our $800,000-and-up market is pretty soft, but our $300,000 to $500,000 (market) is better.’”
“Sharp said that last year his average sale was $738,000. Now it’s closer to $500,000. ‘The higher-end people are nervous about the market,’ he said. ‘The $300,000 to $500,000 crowd, they don’t read the Wall Street Journal.’”
“Most East Bay resale homes and resale condos reflected the drop in sales, whereas more new homes sold, most likely because of slashed prices. ‘Builders will do whatever they have to do to sell they house. They don’t hold onto it,’ LePage said.”
The Press Democrat. “Prices in the three least expensive counties, Sonoma, Solano and Napa, are showing signs of bending under the price pressure.”
“Sonoma County’s June median home price, which includes sales of new homes, resale homes and condominiums, fell 8.2 percent versus last year, dropping to $532,500, according to the report.”
“The median price for new homes dropped dramatically, down 43 percent, from $750,000 last June to $429,000 last month. Condominiums dropped as well, falling from $390,000 to $375,000 last month, a 4 percent dip.”
“The median price for new homes dropped dramatically, down 43 percent, from $750,000 last June to $429,000 last month. Condominiums dropped as well, falling from $390,000 to $375,000 last month, a 4 percent dip.”
“The median price of new homes in Sonoma County has come down because as the market softens, fewer people are able to sell their existing home and trade up to larger ones, said Steven Heath, an agent for Santa Rosa builder Carco Homes.”
“‘What that says to me is that someone who wants to sell his house and move up is not able to do it anymore, or do it comfortably,’ Heath said.”
“At the least expensive end of the spectrum, condominiums appear to be dropping to the point where more first-time home buyers can make the leap from renting to owning, said Joe Henderson, of Keller Williams in Winsdor. ‘I think prices are getting down to the point where buyers are able to snap ‘em up,’ Henderson said.”
The Sacramento Bee. “Two years into Sacramento’s real estate slowdown, the gulf between what sellers want for their homes and the price buyers are willing to pay continues to widen across much of the eight-county region.”
“In Sacramento, one of California’s major inland growth regions, escrow closings for all homes were the lowest for any June in a decade, according to DataQuick.”
“The number of for-sale signs at existing homes reached a record 15,566 in El Dorado, Placer, Sacramento and Yolo counties, according to Sacramento-based TrendGraphix. Factor in 4,899 new and yet-to-be-sold homes reported by area builders in June and it pushes the total number of area houses for sale past 20,000.”
“‘We’re not prognosticators,’ said DataQuick analyst Andrew LePage, ‘but my forecast for buyers would be sunny skies ahead.’” “The median sales price of all homes in Placer County was $428,500 in June, 18.5 percent below its December 2005 peak of $525,500.”
“Although more than 3,000 houses changed hands in June, it was hardly the surge normally associated with the month and its big-selling colleague, August.”
“‘Sacramento is sort of out there drifting all alone again without much influence from the outside, namely the speculators or investors from other parts of the state,’ said LePage. ‘We know that’s what helped fuel the frenzy that brought us to a peak in both sales and prices.’”
“Elk Grove real estate agent and broker associate Jon Nastro said he turns down listings of sellers who still want 2005 prices. The region’s record inventory, he said, stems from ‘too many unrealistic sellers.’”
“Bob Bronswick, president of the Sacramento/Tahoe region of Coldwell Banker Residential Brokerage, said rising inventory is also driven by people facing financial trouble.”
“‘People bought in 2004 with those adjustables,’ he said. ‘Their rates are starting to change now. My gut feeling is we’re seeing more people that understand the situation they’re getting into and putting the house on the market to avoid it.’”
The Merced Sun Star. “So much for summer being the hot selling season. June home sales were dismal throughout the northern San Joaquin Valley, and sales prices plummeted. Merced County home prices plunged more than 23 percent in June compared to a year ago, dropping to a median $290,000 selling price.”
“Stanislaus County homes sold for a median $343,250 in June, which was about 9 percent below last year. San Joaquin County homes sold for $396,000, which was a nearly 12 percent drop.”
“As low as those prices were, homeowners who sold property in June should consider themselves lucky because most who tried failed. Home sales nose-dived throughout the region by more than 43 percent, compared to last year.”
“Northeast Modesto, including the new home developments of Village I, had sales volume drop 31 percent and prices tumble 23 percent to a median $336,000. Ripon sales dropped 60 percent and prices fell 27 percent to $455,000.”
“Patterson sales dropped 54 percent and prices fell 23 percent to $407,000. Waterford sales dropped 46 percent and prices fell 28 percent to $285,500.”
“Atwater sales dropped 42 percent and prices fell 25 percent to $275,000. Livingston sales dropped 70 percent and prices fell 25 percent to $310,000.”
“The continued price plunge means Merced is settling into a ‘normal market’ after a period of hyperinflated activity, said Scott Oliver, president of the Merced County Association of Realtors.”
“‘Home prices now are back to about what they were in 2003,’ said Ernie Ochoa, who manages the Century 21 M&M and Associates office in Merced.”
“Even those rolled-back prices are too high for most families. ‘The median-income family earns about $47,000 a year in Merced County,’ Ochoa said. ‘So it only can afford to buy a home priced about $175,000.’”
“Ochoa said Realtors listed 1,437 used homes for sale last month in Merced County, but they sold only 53 of them. ‘We’re got a huge supply of homes for sale,’ Ochoa said.”
“Buyers have lots to look at. They can pick between foreclosed properties repossessed by banks, new houses just finished by builders, and older homes offered by anxious owners.”
“The relentless downturn in the housing market means Washington Mutual Inc. plans to jettison more than 100 jobs in the East Bay.”
“Washington Mutual has decided to shut a Dublin office that handles subprime residential mortgages, said Olivia Riley, a bank spokeswoman.”
“‘These actions are a result of the changing subprime market,’ Riley said. “The bank also will tighten its standards to qualify potential borrowers, a move that could banish a larger number of consumers from the home financing market. ‘We are not getting enough volume for these mortgages,’ Riley said.”
“The job losses, bankruptcies and company shutdowns that plague the industry are the natural result of a market that became overheated, said Doug Nesbit, sales and marketing director with San Ramon-based CMG Financial Services, which provides home loans and other financial products.”
“‘The pendulum probably swung too far, and now it is swinging back towards more traditional lending guidelines,’ Nesbit said.”