Loading ...And now for the next chapter in the continuing saga of the national real estate slump. California Association of Realtors reports that sales decreased 24.7% in June as compared with June of 2007. The median price, meanwhile, was up slightly, increasing by 3.2% in June as compared to May of this year. So what does this mean?
“The focus on foreclosures and subprime lending is ongoing and, coupled with higher inventories of homes for sale, is prompting many would-be buyers to play a ‘wait-and-see’ role,” said C.A.R. President Colleen Badagliacco. “However, well-maintained homes with curb appeal that are priced for today’s market continue to sell. It’s often a matter of counseling buyers and sellers to set realistic expectations on both sides of the transaction.
“First-time buyers continue to be impacted by tighter mortgage underwriting standards and the affordability challenge, which has not improved significantly despite price declines in most regions of the state,” she said.
However, remember this is for the whole state of California, including Southern California, which is softer than the bay area, and the Central Valley and Sacramento markets, which are in a deep slump.
“With just over a 10-month supply of homes for sale on the market, we expect further softness in prices in the coming months,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “The San Francisco Bay Area continues to see leaner inventory levels compared to Southern California and the state as a whole.
“Unlike the downturn we experienced in the early 1990s, the sales decline is not driven by weakening economic conditions,” she said. “Both the California and U.S. economies continue to expand.”
Certainly, while local market conditions for Pleasanton, Dublin, and the Tri-Valley are sluggish, the market is not depressed, and in fact it is healthy when compared with other parts of the state and the country. There remains fairly steady sales, and inventory, while at a seasonal high, is still not excessive my any measure.
Meanwhile, new home builders, not to be outdone by their resale counterparts, announced today that new home sales nationally were down 6.6% in June, which was about three times the decline analysts expected. In the West, sales of new homes were off 22.5%, which is not good news. Nationally, the median home price also declined 2.2% from a year ago.
And to complete the trifecta, the National Association of Realtors announced that sales of resale homes declined 3.8% in June to the lowest level in 5 years.
Again, it is time for a sense of perspective here. Yes prices have eroded since 2005, in some markets by as much as 15%. But prices rose by 30 to 40% prior to that. And again, the prime bay area markets, such as the peninsula, South Bay, Marin, and Pleasanton, Dublin and the Tri-Valley, are doing much better than the rest of the state, and indeed the rest of the country. And if there were ever a market to buy in, this would be it.
Now back to reality…
Courtesy of California Association of Realtors and Yahoo News
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