Every week I get an e-mail from C.A.R. (the California Association of Realtors) called the “C.A.R. Newsline”. It’s basically a summary of select news items of interest to California Realtors. This weeks’ bulletin contained some more “delightful” news: C.A.R. reports a sales decrease of 38.9%, and a median home price drop of 4.7%. Here, read for yourself:
Often times, I don’t pay stories like this much heed, since it isn’t particularly useful to look at California as an entire market. In fact, it isn’t particularly useful to look at Santa Cruz County as a whole market – some areas are doing well, others…not so well. But this article is good in that it breaks down the sales by county. You can see the numbers for Santa Cruz county buries in there.
What’s interesting is that we are seeing a sales decline and a median price decline in almost every county. There are a few regions where we see that prices are going up, still – but I’ll bet that this is because, as in Santa Cruz county, it’s the mid-and-upper-end houses that are selling, not the lower end. However, regardless of area, there is a large (some would say alarming!) drop in the number of home sales – for example, it says that sales in Santa Cruz County are off 34.3% from September ’06. And September ’06 was quite a bit off from September ’05 (but I don’t have those numbers handy).
So, let’s see. We’ve gone from a hot hot seller’s market of 2-2.5 years ago, then we went into a “balanced market” where prices were not going up so fast, but there was still a good mix of supply-and-demand…to today, where for almost all properties, it’s definitely a buyer’s market.
Buyers, what are you waiting for? I no, don’t tell me – you are waiting for prices to drop even further. I can’t say as I blame you – if you don’t need to buy now, it seems there’s little to be gained by doing so. It’s an interesting time: prices are dropping, but there has been no corresponding rise in interest rates or unemployment, the two factors which traditionally bring on price declines. No, this time, it looks like the price declines are attributable solely to…the bubble deflating.
To the chagrin of many who prognosticated a great implosion of home prices, it seems that is not our fate. What we’re seeing is a slow (but steady) decrease in home prices in many areas. When exactly the turn-around will come is anyone’s guess. Many folks are saying it’ll be another 12-18 months. It’ll sure be an interesting wait. 🙂