Central California Home Sales, Prices Fall Further

Central Valley, Calif., existing home sales and prices continued to slide in June, the California Association of Realtors reported Wednesday.

While the pace of sales dropped by more than a third (34.3 percent last month compared with June 2006) in the Central California housing market, the Valley’s median price skidded to $329,960, down by 9.1 percent from $362,960 a year ago.

That is a worse showing than the state overall, where home sales dropped 24.7 percent in June from the year-ago period and the median price of an existing home rose 3.2 percent, primarily because of gains in coastal regions like the Bay Area, Monterey and Santa Cruz, and Los Angeles and San Diego.

One Stockton real estate agent, Mike Collins with Collins Realty Inc., said there are signs the housing market downturn may be hitting bottom.

“We have seen it decrease throughout the year, as those numbers report,” he said Wednesday. “It does feel stronger. We’re getting sales. We’re getting inquiries. We may be at the very bottom of this thing, I hope.”

Still, association officials predicted no quick turnaround of any kind when it comes to California mortgage applications.

“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 Leslie Appleton-Young, V.P. and chief economist.

“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.”

What is playing havoc with the housing market are news about rising home foreclosures and defaults on risky bad credit home loans, as well as issues of affordability and tighter, more expensive credit.

Second quarter foreclosure notices in San Joaquin County tripled to nearly 2,000 compared with the same period last year, according to information released this week by DataQuick Information Systems.

Statewide, California mortgage defaults have risen and recently hit their highest levels in more than a decade.

Actual foreclosures in the county jumped to 785, about 12 times the second quarter 2006 level, DataQuick reported.

All of these factors are playing a role in buyers waiting out the market, for better or worse.

“The focus on foreclosures and [bad credit home loan] 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 association President Colleen Badagliacco.

“First-time buyers continue to be impacted by tighter home loan underwriting standards and the affordability challenge, which has not improved despite price declines in most regions of the state,” she said.

While the Realtors do not provide home sales or price figures for Central Valley counties or cities, DataQuick does so for median prices on all new and resale homes and condominiums.

• Over the past year, according to DataQuick, San Joaquin County’s median housing price fell 12 percent in June, down to $390,000.
• Prices fell most sharply in Lodi, where the median sales price was $320,000 last month, down 15.5 percent from June 2006.

CAR’s unsold inventory index for single-family existing homes stood at 10.1 months, meaning the available supply would be sold in that time at the current sales rate. In June 2006, the index was 6.1 months.

The median number of days it took to sell single-family homes was 51.7 in June 2007, compared with 45.3 for the same period a year ago, the group reported.

SOURCE: The Stockton Record