"Like a Rock"
Do rocks make soft landings?
Like a rock: California home sales plunge as prices riseSales in the Sacramento region fell even further, down 38.7% from June 2005. California is now where Sacramento was back in November or December of 2005.
Apparently there's a limit to what Californians will pay for the American dream and that stops short of $600,000. The median price of an existing home in California increased 6.2 percent in June to $575,800, according to a survey by the California Association of Realtors. There weren't a lot of buyers at that level.
Home sales statewide plummeted by 26.3 percent compared to June 2005, which, the Realtors note, was a record month for sales. In the Central Valley, the median price of a single-family home was $362,960 last month, up 2.1 percent from the previous month and up 2.6 percent from a year earlier, according to the Realtors.
But Central Valley home sales dropped more sharply than the state as a whole, down 34.5 percent from June 2005.
6 comments:
Looks like the seller's just don't get it...yet. Realtors need listings and a good way to get one is to overprice the home to the seller's satisfaction. Though the price is unrealistic, the seller happily believes he can squeeze a higher price out of his/her property even though there are hundreds of properties competing. The house sits, the seller becomes impatient, and the agent suggests a more reasonable price to move it. Meanwhile, more homes are added to inventory, ARM's begin to reset, inflation eats away at disposable income, home equity loan payments skyrocket,and the price deflates to meet lower buyer demand. This is Economics 101. IMHO, we're six months away from homes for sale at deep discounts regardless of real estate agent double speak about median price increases. The price can artificailly move higher but with too few buyers, it must correct to meet those who will buy.
And July's numbers will be blamed on the heat. Then August's numbers will be a "rebound" from July even though down significantly y-o-y. This will be called an early start to the busy fall selling season, etc., etc.
the smart real estate agents will not list at an unrealistic price in this market.they will let the newbies spend their own money advertising properties that won't sell.in a somewhat healthier market i could see listing too high,and bringing it down,but right mow it is the kiss of death.the oldtimers i know are pricing right,or refusing the listing if the seller won't be realistic.there are very few buyers and the smart agents realize they can't afford to waste time or money.
Smart agents won't, but the real estate boom brought a lot of non-smart people into the business because it looked like easy money.
I was just looking over prices for the area of W.Sacto that I scrutinize... for houses the same age and square footage, pricing is all over the map. There is at least a $60,000 price range between the highest and lowest offering prices for the SAME models that are the SAME age in the SAME neighborhood.
Prices were all over the map in 1991 just before California's collapse in prices accelerated. Some sellers were still in denial while others knew they'd better get out.
'91 might look like a banner year compared to what's shaping up right now. The poor lumpen have nothing but "denial" to hang on to.
Cheap mortgage rates are resetting and sending payments through the roof, Home Equity Line payments are climbing every month, jobs are being created but wages are stagnating at the lowest levels in many years. Add 500,000 prowling CA RE agents, mortgage brokers on every corner, Title companies, and support services like laborers, inspectors, landscapers, all in support of a wide upswinging market...someone's about to lose their job and most likely their home. This has got to be bigger than the '91 bust because it lasted nearly twice as long and people have come to depend on their new found wealth. Ugly,Ugly,Ugly!!!
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