Buyers Seek Bargains in California Housing Market

News about the California housing market downturn and the market’s future is of little relief to struggling sellers… but may bring encouragement to bargain-hunting home buyers.

In Yuba and Sutter counties, the median home price for a single-family home had climbed from $99,000 in January 2000 to $300,750 in May 2006 before dropping to $268,000 in January.

The median listing price rose to about $285,000 in April but drifted back to about $270,000 in May.

The number of homes on the market is increasing, and Leighton said spring sales were “lackluster” in the face of rising California mortgage rates.

“My belief is the worst is behind us, but it’s still likely we will see some declines in price,” Realtor Lloyd Leighton said.

Sellers, many of whom enter the market because of divorce, job loss, home mortgage problems or other financial difficulty, are unhappy about the downturn, Leighton said.

But some buyers are excited to find price drops not seen in years.

“It’s like going to the 20 percent off sale at Nordstrom’s,” he said.

Leighton’s advice to buyers is to remember affordability concerns, avoid adjustable-rate mortgages when possible and buy for the long-term, and for sellers to price homes competitively and display them to their best advantage.

David Burrow, president-elect of the Sutter-Yuba Association of Realtors, attended the California Association of Realtors’ legislative session in Sacramento two weeks ago to discuss the housing market’s current issues and possible solutions.

Affordability woes and mounting concerns over the perils of aggressive California mortgage loan financing are major issues, Burrow said.

Many buyers facing foreclosure are victims of bad credit home loans, which are often based on flimsy credit requirements and feature interest-only payments.

The market’s downturn is not abnormal, but intense national and regional attention makes it look that way, he said.

“It puts fear in the mind of the buyer,” said Burrow. “They don’t want to be in the position of their friends who bought a home two years ago.”

It is also misleading to look at the average California housing market because it does not reflect what is happening in this area, he said.

He added that customers don’t see the opportunity created by lower prices and home loan rates.

The California real estate brokers’ association predicts the housing sales downturn should be over in about a year, said Burrow, who believes the Yuba-Sutter area’s continued growth will create more jobs and bring in people who buy homes and help pull the market out of the doldrums.

“There’s really no reason for people to not be buying a home,” he said. “It’s a buyer’s market.”

SOURCE: The Appeal-Democrat