'Confused' Potential Buyers Remain on the Fence

From the Sacramento Bee:

Prized species spotted locally -- homebuyers

Now that it's done, Joi Bess couldn't be happier about selling her Rancho Cordova house and buying a bigger one in Folsom...Bess says she still wishes she had made more off the house in Rancho Cordova. But she takes comfort in knowing she got a house in Folsom for $100,000 less than those like it cost two years ago..."Our consensus was if you're going to do something, you better do something now," she says.
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In what's proving to be a second straight year of slowed sales and falling prices in many neighborhoods, that closing makes Bess a hero to the Sacramento region's real estate trade. She is a buyer.
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"I wish all the other people luck," she says from the calm of her new house. "I still see a lot of other properties for sale. I remember that feeling: 'Is it going to sell?' It's really a tough game."
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[Michael] Alexander recently stopped looking -- for now. He cites the sudden crackdown on 100 percent financing due to rising numbers of loan defaults..."It was starting to look feasible," Alexander says. "It was really looking feasible. We talked to a Realtor a few weeks ago, and that's when all the credit issues hit."

Alexander's departure from the buyer pool puts him among an estimated 30 percent of potential buyers who have vanished from area model homes and open houses as the real estate season reaches its busiest months...Alexander says, wherever he looks he sees prices going down. Or he sees that prices are too high and the houses aren't selling.
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The Wahlstroms, a couple in their 50s, recently toured an Elk Grove condominium complex. Its builder had contracted with an auction company to unload a handful of unsold units. The opening bid for a 1,200-square-foot condo previously valued at $259,900: $149,000.

John and Celeste Wahlstrom looked one over for their 22-year-old daughter, who saw it advertised on television..."But we're not in a hurry," John says.

Part of the reason is uncertainty about where this market is heading. In 2001, the couple bought a house in Elk Grove and more than doubled their investment before selling it. They're not having the same luck with the value of their new house, bought in 2005. "I don't know about the values," says Celeste. "Right now everything is going down."

With that sentiment, the Wahlstroms take their place among thousands of potential buyers whom sales reps for home builders sometimes describe as "confused." Many would-be buyers who have seen prices fall for months are waiting for them to fall more.

Even as agents clamor that "now is the time to buy," they remain on the fence. They're waiting for the bottom of a market that began to weaken in late summer 2005.