Wednesday, January 18, 2006

"Still a Buyer's Market" in San Joaquin County

Stockton's RecordNet is reporting a slight decrease in inventory for December 2005. This follows the pattern of the Sacramento region as described in a previous post. It would be interesting to know how much of the decrease in inventory is attributable to expired listings, as seems to be the case in the Sacramento region. Also, according to the article, the median sales price in the county moved up after being flat for three months.

Signs of a reinflating housing bubble market? Not according those quoted in the article:

That's misleading [the decrease in inventory & increase in median price], though, said Patrick Bill, real estate agent with Preferred Real Estate Group, Tracy. The market is still flat, he said. "Certainly, it's still a buyer's market because of the inventory," he said. "The prices are soft but steady." Bill said he thinks the healthy market will remain so as activity picks up this spring but doesn't expect prices to take off again - "certainly nothing like the 30 percent a year we have seen."

Jerry Abbott, president and co-owner of Coldwell Banker Grupe of Stockton, said the December numbers probably are an aberration. He expects listings to start climbing again the next few months, culminating in a good sales season. "That's what remains to be seen," he said. "Will we have a good selling season? I think we will. 2006 will still be a very good year for real estate, but it's going to be different. Buyers will have a lot more choices."...

Linda Roybal, real estate agent with Docter & Docter Real Estate of Stockton, said some sellers got a little scared when the market slowed down during holiday time, though that's a typical slow period. Although sellers had been expecting sales prices to continue going up as they had in the past, she said, "now they're more realistic."
For inventory trends in San Joaquin County between September and November 2005, see this blog.

For more information about this market, see the RecordNet's November article. In that piece, a real estate agent predicted a 15% decrease in prices in 2006:
Even with prices holding steady in the past several months in the Manteca area, Cheryl McFall, broker and manager of the Re/Max Executive office in Manteca, sees prices falling by 15 percent next year because of the soaring number of homes hitting the market.

There have been price reductions on a lot of listings in the last three to four months as inventory has jumped to triple that of a year ago, and the competition is very tough, she said. Manteca-area listings last month totaled 467, compared with 151 in October 2004, according to the latest Coldwell Banker Grupe-TrendGraphix monthly sales report, based on Multiple Listing Service data.

"I don't think the bubble is bursting," McFall said. "We're just having a return to normalcy. We couldn't continue to see the increases in prices we saw this year. Nobody would be able to buy a house."
I guess it takes more than a 15% decrease to bust this bubble.
Jerry Abbott, president and co-owner of Coldwell Banker Grupe in Stockton, said he expects sales prices to fall, at least for some types of homes. "I guess the million-dollar question is: how much?" Homes under the $500,000 are still relatively affordable and will hold value, he said, but the sales prices of more-expensive homes will shrink next year.

"We definitely will see a softening of the marketplace," he said. "I believe inventory will continue to climb, and it will outpace demand."

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