Thursday, June 08, 2006

"Buyers are Becoming a Precious Commodity" in Chico

A blog called Post Scripts has this rare report on the Chico housing market:

Could Chico home prices be about to fall? If you look at the inventory on MLS you might think so. It's up about 3X over last year with around 277 homes on the market. This week there were more homes offered on the MLS tour than at any time all year. The stock market is jittery and it's taken a beating recently over inflation woes that are leading us ever closer to higher interest rates. Now toss in the sky high gasoline price and it stands that sooner or later this absurdly high $220 per average s.f. price will have to come down. If homes are not selling right now, what choice do sellers have? It's happened many times before and its going to happen again, so the question is not IF, but when?

UPDATE 5/30/06: Condo prices are falling. Home prices have stalled. MLS inventory as of 5/30/06 has risen to over 400 homes and they just aren't selling like they should. Buyers are becoming a precious commodity at local real estate offices, listings that are not priced to sell are used to sell those that are.

As interest rates climb from this point on, there will be more pressure on sellers to lower prices to offset higher finance costs to buyers who are becoming increasingly more selective and more demanding.
And here's a tidbit about the Redding housing market:
Palomar Builders Inc., Redding's largest homebuilder, is being acquired by Premier Homes of Roseville, both companies announced Monday...The Palomar-Premier deal comes at a time when residential real estate is slowing in Shasta County. Housing starts in Redding through April are off 42 percent from last year. Home sales countywide also are down for the year.

12 comments:

Happy Renter said...

It wasn't that long ago when Chico was the fastest appreciating city in the country.

Lander said...

Chico Leads Housing Bubble List

Happy Renter said...

Ziprealty posted stats on Citrus Heights, more declines.
The jewel was this.

"Percentage of homes on the market where the price has been reduced: 43.6%"

Max said...

I just ran some quick numbers for Sacramento County Pending vs. Active listings, and I'm stunned. On April 9, there were 8101 active listings with 1416 pending. Now, there's 10142 active listings and only 1156 pending. The buyers are running for the exits, and fast! Check my latest post:

http://sacrealstats.blogspot.com/

norcal ray said...

"I just ran some quick numbers for Sacramento County Pending vs. Active listings, and I'm stunned. On April 9, there were 8101 active listings with 1416 pending. Now, there's 10142 active listings and only 1156 pending. The buyers are running for the exits, and fast! Check my latest post: "

WOW, those are some bad looking numbers. At least 9 months inventory, probably a lot of investors trying to cash out. Looks like a hard landing is inevitable.

Happy Renter said...

I knew the figures were going to be bad when we didn't hear anything from any of the realtors.

Happy Renter said...

How blind do you have to be to be converting industrial building into condos at this point, especially $300,000 condos.

http://sacramento.bizjournals.com/sacramento/stories/2006/06/05/story6.html

Max said...

These developers are amazing. That area directly parallels the light rail tracks and busy 16th street. Hope you don't mind the panhandlers and late-night light rail weirdoes accosting you as you walk back to your $300,000 condo! :)

tom stone said...

everyone wants to live in chico,they make velveeta there.

James said...

max - have to disagree with you on condos near 16th and light rail. The days of cheap oil and gas are over. In the long run, condos and homes in the inner urban core, near job centers and near public transit hubs will be in demand. Outer commuter 'burbs will take the biggest hit in the R.E. downturn. Who wants a 2-hour drive home when home is upside down on the mortgage?

James said...

Now we're gettin' desperate: advertising out of state on Craig's list: http://sacramento.craigslist.org/rfs/169548596.html

FredB said...

And yet, YoY median prices are up 11%.