Monday, March 20, 2006

"Unrealistic Expectations of Sellers" Causing Sales Slump; Inventory Up 176%

The Sacramento Business Journal reports that February sales in the Sacramento region fell 31.7% compared to the prior year. This is based on Trendgraphix data for houses, condos, and halfplexes.

Sales of existing homes in Sacramento, Placer, Yolo and El Dorado counties continue to be down about 30 percent so far this year compared to last year. Trendgraphix, a data-collecting subsidiary of Lyon Real Estate, says that in February 1,333 houses, condos and halfplexes closed, compared to 1,919 in February of last year, a 31.7 percent decline. Overall for the year, 2,912 homes closed, compared to 4,198 last January and February -- a 30.6 percent drop.

Rising interest rates and the "unrealistic expectations of sellers," caused the downshift in sales, said Mike Lyon, Trendgraphix's president and Lyon Real Estate's CEO. In other words, the sellers' market of the past few years has weakened. Buyers are fewer and therefore have more power. That's shown in the larger inventory of available homes. Lyon estimated the inventory is 176 percent larger than it was in February 2005.
In contrast, according to the Sacramento Bee, sales in the Sacramento region fell 26% in February. This is based on Dataquick data for single-family homes only.
Regionally, February's 1,743 home sales - 65 more than January - began to reverse gloomy year-to-year trends of the past two months. Though sales were still 26 percent lower than February 2005, they improved on January's 29 percent year-to-year decline, and 31 percent in December, according to DataQuick.

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