Saturday, October 07, 2006

Prices Hit the Valley Floor?

From the Chico Enterprise Record:

A study released this week by an East Coast economic research group reported housing prices will drop dramatically in Butte County by 2008. The study by Moody's Economy.com in West Chester, Pa. notes that housing prices in the Chico Metropolitan Statistical Area -- basically Butte County -- will drop by 12.6 percent by the second quarter of 2008 from the 2004 fourth-quarter price...

A softening in the Chico market isn't a surprise, according to 2007 Chico Association of Realtors President Kym Campbell of W.M. Campbell Real Estate. Campbell said she's seen dropping prices and longer stays on the market, but she's not sure about the size of the drop predicted by Moody's. "I think there's more inventory. Sellers have been reacting to the great market."
From the Redding Record Searchlight:
Redding ranked 16th on a list of the top 30 U.S. metropolitan markets expected to suffer the sharpest declines in home prices, according to a forecast released this week by Moody’s Economy.com, a West Chester, Pa.-based research firm...

Redding’s median price for a home is forecast to fall by 11.8 percent. "That’s about right," Ron Largent, agent/owner of Keller Williams Realty in Redding, said Thursday. He thinks prices could fall "another 10 percent" from where they were a month ago before leveling out...

Home sales slowed and prices fell in Shasta County in August. The median sales price was $245,000 compared with $269,000 in July and $285,000 a year ago, according to Dataquick...

One reason Redding’s prices are softening is the cooling ardor of investors. A year ago, Redding led the nation in the percentage of homes sold to investors — 22 percent — according to LoanPerformance, a San Francisco-based mortgage research firm. Through May of this year, 15.4 percent of homes were bought by investors. That was still nearly double the national average of 8.9 percent.

The forecast of a price decline "sounds like old news, or at least we’re right at the end of it," said Greg Lloyd, broker/owner of Real Estate Center in Redding. Lloyd is also president of the Shasta Association of Realtors. "We probably peaked out very early this year and I would suspect we have hit the valley floor as we speak.

7 comments:

Anonymous said...

12% drop from 2004 4th Q price by 2008? Haven't prices already dropped by that much already, and continuing?

beebs said...

Seems to me that prices have already dropped that much in the Bay Area.
Houses that are overpriced aren't selling.

Anonymous said...

The Jim Jones School of Realtors and Koolaid Drinkers graduates classes every week, and some of these dufus' come back for refresher courses...

There are still dirtbags in Granite Bay/Loomis who believe the idiot up the street with the ugly stucco box will get the million they are asking...but, BUT, nobody is looking at their stinking houses...

and Redding and Chico? LOL...That's the home base of the Jim Jones Real Estate and Kool Aid Drinkers School of Real Estate and Land Appraisal...they have "Jim Jones" branches in Sacramento, Marysville (to service Plumas Lake), Merced, Stockton, Lodi and Modesto!

JR said...

Anon 10:54 AM

You are absolutely correct. In my neighborhood in Rocklin, prices have dropped 15%, if not 20%. The same model of house on my street: One sold on 2/18/05 for $486,000. An identical house was listed on 9/1/05, went thru multiple price reductions and finally sold on 8/30/06, one year later for $389,000. That is a 19% reduction. It is very strange how the statistics are lagging indicators of actual pricing on the street.

Anonymous said...

Prices are falling like fat guy who's chair was pulled away from him. Their is no stopping it now, we are in free fall. I think we may have 15% decline in better areas of Sacramento and 30% in less desirable areas as of today!!!!! 40% to 50% drop in Sacramento area home prices not far off. Probably two years, the housing market is now commodity and prices are falling like any over priced commodity would.

Anonymous said...

Oh I completey agree. I know of one house in South Sacramento listed for 300K three months ago and I know that if someone offered 190K that would take it. However, nobody has even made an offer. It looks like a 50% drop is not too far off.

drwende said...

What I love is how some sources are forecasting 10% drops from prices in 2004, which was not the peak. In some areas, prices rose another 30% between 2004 and the peak in 2005. A 10% drop from 2004 prices is a much higher drop from the real peak... and the overbuilt tract areas could easily drop 40% from 2005 before hitting bottom.

Soon the news will be trumpeting healthy 10% increases... from prices in 2001!