Slowest May in 12 Years
From the Sacramento Bee:
A long, slow search for bottom continues across most of the region's real estate market...DataQuick's newest numbers reveal a Sacramento market that some believe may be finding bottom in a downturn that began nearly two years ago. Others say they don't see it yet amid mixed indicators that baffle even real estate insiders.Chart of home sales/prices by zip here.
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[L]enders say their prospects have dimmed a bit after gains in January and February. "The amount of calls we're getting has gone down. There's been a fall-off from March of this year until now," said Jim Paterson, partner and mortgage broker at Gold River-based Mortgage Consultants Group.
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"It doesn't look like there's a lot of steam building at the moment, and we're coming up to the peak of the buying and selling season," said DataQuick analyst Andrew LePage. May closings fell to a 12-year low for the month in Sacramento County, mirroring much of the Bay Area and Southern California. Placer County's sales numbers were at a 10-year low, according to DataQuick.
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[Sacramento Association of Realtors President Tracey] Saizan said, "I personally do not see the bottom yet."
But Sid Dunmore, owner of Granite Bay-based Dunmore Homes, disagreed. "I think right now we're probably bouncing around the bottom," he said.
Sacramento-based researcher TrendGraphix reported 14,704 existing homes for sale at May's end in El Dorado, Placer, Sacramento and Yolo counties.
Compare to other Sacramento price indexes here.
6 comments:
A lot of realtors right now remind me of a (hypothetical) Ferrari dealer sitting around wondering why he can't sell that many cars.
Simple answer: PRICE
My wife and I make a decent living and own a very nice house (bought in 2003). We made $120K last year.
With the equity we have on the house (about $200K right now), all we could realistically purchase with a conventional loan is a similar house.
We could sell now and wait, but we like our house too much. And we discussed that we prefer to have lower prices and lower payments all around before we move up.
The market has to do two things before returning to normal.
1. Prices have to come back in line to what people can actually afford.
2. Inventory has to come back to normal (Inventory Clearance! sale anyone?)
Not only can folks not afford to trade up....I know of folks that can't afford to trade down now that the kids are out. They are stuck in more house than they need/want because they purchased it 20 years ago and their taxes are super low. It would be more expensive to sell and buy a cheaper place with today's taxes.
People can't move up, people can't move down, new people can't afford to purchase...who the heck does that leave... aside from the wealthy and transplants from more expensive metro areas?
There's no capitulation in this market. People complain they can't sell their homes, when in fact, they could if they priced their homes right. Agents and their sellers cling to prices that won't sell homes... adding more and more merchandise to the store racks.
Affordability gets worse when interest rates are approaching 7% for a 30 year note. With NOD's turning into foreclosures at such a high rate, the new higher rates will push those on the edge... over the edge.
Even the bank owned numbers don't work. A high percentage of bank owned properties go back into inventory regardless if they've been hawked on the court's doorstep or not.
Imho, a market that's hugely over valued will experience some form of panic before a bottom sets in. A run for the door probably gives a signal that its time to consider buying. So far we've seen none of this. Maybe its because we get mixed or wrong signals from the media, investment community, or the real estate intelligencia (if there is one).
There's some level of inventory that ignites a price war. We're beginning to see isolated cases around the area where huge discounts are happening. Once that permeates the entire market, prices will go down...
SMF - thank god another homeowner!
Buying time - in SAcramento County at age 55 (I think) you can move your low property tax base 1 time - a real cool benefit. SO that person can move down, take up to $250K gain tax free (500K if married filing jointly) and take that old tax bill with them. You were saying....?
Diggin, "slowest May" reflects closings from slow contract months that have been impacted also by the subprime melt down. I'm seeiing rising activity in markets where price adjustments were made and inventory is low.
Inventory is climbing and prices lowering in the areas I'm looking at (Dixon, Davis, Woodland). Only the short sales seem to to be selling. The REOs and regular resales are seeing little activity.
And I have no issue with short sales selling as they are steadily lowering the comps - all good by me.
Sippin, that tax option is available in all countys but you cannot trade down, you have to buy a more expensive home. And all those million dollar homes you said are moving like hotcakes, not seeing it. FIT has several homes in this range on the market for a long time and the prices are still retreating with no buyers.
Sell in May and go away now applies to RE too.
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