Thursday, December 14, 2006

Sellers 'Missed the Boat,' San Joaquin Median Price Plunges 9.2% Since July


From the Stockton Record:
Much of the housing-market slowdown has been attributed to a spiraling of the number of homes for sale, pressuring sellers to lower prices to compete. For example, in February of last year, 777 houses were listed for sale throughout the county. That rose steadily, typically by several hundred new listings per month, to a high of 4,738 in August. Since then, the number of homes for sale countywide has fallen by about 500.

Many homeowners put their houses on the market thinking of the earlier big run-up in sales prices, she said. "They missed the boat, so they wanted to catch the last of the rise," [Natalie] Shishido, [owner of the Preferred Real Estate Group office in Tracy] said.

Also, the median sales price in the county fell from $400,000 in October to $386,000 last month, the TrendGraphix report said. That's down from a high of $425,000 in July.
From Fortune:
The area poised for the biggest fall in 2007? Stockton, Calif., where prices are expected to drop by 7.1 percent and another 5.3 percent in 2008. If you were lucky enough to have bought a couple of years ago, the 23 percent price growth in 2004 and 30 percent in 2005 should cushion any blow. But buyer, beware. If the forecast holds true, a home purchased in Stockton today for $350,000 will be worth a mere $307,917 two years from now. And that doesn't account for the additional toll inflation can take on the true value of your asset.
From the Tracy Press:

Home prices are on the decline in Tracy, which mirrors the overall decline in home prices and sales across the state. As of the end of November, the Central Valley Association of Realtors reported that the median sales price of existing homes in Tracy, Mountain House and Banta has been at $539,000 for the past six months, compared with $575,000 for the same period a year ago.
...
Meanwhile, the Central Valley between Sacramento and Bakersfield, where cities keep growing, has seen prices decline from $363,000 in June to $345,200 in October. "When you have a lot of new home building in recent years, then you have new homes in a market competing with existing homes," he [Robert Kleinhenz, deputy chief economist for the California Association of Realtors] said. "Both markets will see downward pressure on prices.

"Our forecast for next year -- and it’s a fairly conservative forecast -- is we're not through with declining sales." Kleinhenz said he expects the number of homes sold in 2006 will drop about 23 percent from 2005. That decrease in sales will be about 7 percent in 2007.
...
The Central Valley Association of Realtors’ statistics for each city show the median sales price for an existing home in Tracy peaked at about $540,000 in October 2005....The median price for a house back in October was $515,000.
...
Home sales in Tracy have declined over the past year. The association reported 1,211 houses sold in the first 10 months of 2006, compared with 1,845 houses sold in the first 10 months of 2005.

7 comments:

patient renter said...

"a home purchased in Stockton today for $350,000 will be worth a mere $307,917 two years from now"

That estimate still seems a bit tame.

paranoid renter said...

Are you predicting only a 15% drop? I was hoping for more!

Gwynster said...

Make that 250K and it'll make more sense.

rocklin renter said...

I'm gonna bet that the folks that came up with those projections have not spent more than enough time to fill up a car at a freeway-adjacent gas station in Stockton.

Had they spent some "quality time" there while doing their "research" I think their outlook would be far different....

Gwynster said...

Exactly RR

Mr Gwynster and Imade the decision to move into a bigger, better rental for the next 2 to 5 yrs. I've been looking at what is available in EG, Natomas, West Sac ect., and I'm floored at what I'm seeing - huge 2700 sq ft homes listed at $1700 a month! That's far less then the $110 per sqft per month I'm paying right now in the heart of Davis.

I smell blood in the water once people realize how competitive the rental market is about to get.

folsom renter said...

I found a house in folsom for $100 per sq ft last month. 3bd 2bt 3car garage. Selling in the area for the high 500k. This was less than the 2bd aptmnt I left in the same area. The presure is on.

Gwynster said...

I did see some great deals in Folsom and Rocklin as well. Prime Citrus Heights had some nicely affordable rental homes as well.

So far, the places for real pressure are all those exurbs with huge homes. it will be interesting to see how that price pressure gets relayed into the city centers as landlords have to compete for the remaining stable renters out there.