June 26, 2008
There’s More Life in the Cali Market
Depending on whether you are a buyer or seller, the two stats below can either be good news or bad news to you.
1. Home sales soared 18% in California
2. The median California home price is down 35%.
Being a potential home buyer, I particularly like #2.
CNNMoney reported that life returned to the California housing market, as sales last May shot up by 18% compared to the May 2007 of a year ago. What is bringing the buyers in finally? It may be the fact that potential buyers are finally feeling like homes in California are getting more reasonable priced, after the hot hot housing market fattened their values up like crazy.
Now that prices are a bit leaner, buyers are feeling comfortable coming out of the woodwork and putting down their life savings into an asset that they feel is equivalent to what they are paying. The article notes that much of the buying may be due to lots of distressed properties out on the market.
However, there is still debate whether or not the bottom is here and this is the right time. The stats tell us that many are jumping in, but many are still holding their breath. San Francisco’s home prices it noted dropped 20% from a year ago and faired ok compared to places like Monterey County (-49%, ouch!).
So, we’ll see how it plays out, but it looks like there are more players out there now. Are you ready to get in?
David said:
Or it could be that over 1/3 of the sales were foreclosures–banks converting their delinquent home loans to REO inventory, and counting the reversion to the bank a “sale.”
June 26, 2008 9:40 PM
dg said:
Yes, take out the REO sales and you have “regular” transaction volume WAY down any way you slice it.
I don’t know where they got those San Francisco numbers, but for SF Proper, that 20% decline in prices is absolutely not correct.
June 27, 2008 12:54 AM
MD Account said:
I’m one of the folks now entering the market. I’m 44, have been a renter all my life, and never thought I had a shot at buying real estate in CA since I had no equity to bring to the party.
In the subprime days a lot of folks urged me to buy but it just made no sense to me — in five years my payment was going to soar and, in my line of work (I’m a minister) there’s no way my salary was going to have risen to meet it. So I kept renting and eventually moved from Oakland (where I work) to Vallejo, because rents got so crazy.
I’m never going to time the market perfectly. All I know is that, here in Solano County, prices have dropped to the point where I can actually buy a house without being house poor. In fact, one criteria for my purchase is that it has to result in *less* financial stress than renting, and that’s actually possible these days.
This isn’t a flip project; I’m not looking to get rich overnight. Of course I want the house to hold and increase its value, but I’m in this for the long-haul. And if, in the end, what I get is 30 years without a landlord and real housing security, well, that will be just fine. The market will recover at some point, and I’m in no hurry; after all, patience is a virtue!
June 27, 2008 1:00 AM
peninsula renter said:
Can someone confirm that homes going back to the bank are counted as sales in these stats? I always wondered that… If so… is there any way to back these numbers out to get real sales?
June 27, 2008 8:37 AM
jackalope28 said:
I got into the market as a first-time buyer in the Bay Area, over in the Grand Lake district in Oakland.
My experience is that homes that are in great shape, in a great location, and priced correctly end up being sold quickly - in my case, a multiple offer situation.
However, the above scenario is not a newsflash; it’s just good ol’ common sense.
I’m pretty grateful everyone’s freaked out about the market and so many people are on the sidelines as that opened up a great opportunity for me that frankly I don’t think would have existed a year ago.
I stuck to my budget and my parameters and was unwilling to get into bidding wars or an emotional purchase, and I’m pretty pleased with the outcome.
If I were a flipper or investor I might be more concerned with timing the market exactly so, but for my purposes (raising my family in a good neighborhood) as long as it was right place, right price, I’m happy with the outcome.
June 27, 2008 9:01 AM
David said:
Grand Lakes’s a great ‘hood. You’ll do fine as long as you can stick around for awhile.
June 29, 2008 3:54 PM