Get Your Boots On Baby....
...It is getting thick and deep!
"April home sales in Sonoma County sank to their lowest level for a month in five years while prices remained flat, further evidence the housing market is settling down."
"The market is coming into balance between buyers, who have plenty of homes to select from, and sellers, who must price homes more competitively."
The market is not coming into balance. The listings have spiked upwards with no end in sight. Buyers DO have plenty of homes to choose from, if they were only inclined to buy. There are many more homes than buyers.
Supply and Demand are NOT in balance. Prices are not in balance with incomes. And the cost of ownership is still double if not three times the cost of renting.
The only balance I see here is the BS being juggled between the real estate agents, mortgage lenders and the newspapers. Seems they are playing a mean game of "hot potato" with the truth and none of them can bring themselves to hold onto it let alone speak it.
"The April median resale price was $596,925, the second consecutive month with little change compared with prices a year ago."
In Sonoma the median is: $618,000
Glen Ellen: $714,000
Rohnert Park: $580,000
Santa Rosa: $570,000
'"It is a great buyer's market. It's just a little more challenging for sellers," said KC Garrett, an agent with Frank Howard Allen Realtors."
No... it is not a buyer's market. With prices like these so out of touch with the reality of the incomes, and budgets of buyers and so inflated from rent prices this is what is called a sucker's market. Only suckers would buy now. Stupid ones.
By the way...(courtesy of Ben Jones from the Housing Bubble Blog)
“Misrepresentation claims continue to be the largest source of legal troubles for real estate brokers, said Laurie Janik, general counsel for the NAR trade group. Agents and brokers should not make any statements about future market conditions, Janik also said. ‘Don’t say anything like, ‘This well will never run dry.’ It’s a sure recipe for disaster,’ she said.”
Back to the Press Democrat programming already in progress:
"The number of homes listed for sale at the end of April has doubled from the past year, reaching 1,571."
From Norcal mls: 3310
SFH's only: 2828
Ziprealty SFH only: 2549
803 on the price reduced list
Looks like the REAL number is DOUBLE what the Press Democrat is claiming ...
Sonoma County listings progression
3/20/06 = 1742
3/26/06 = 1766
4/03/06 = 1888
4/19/06 = 2828
4/25/06 = 2868
4/30/06 = 2898
5/07/06 = 3052
5/13/06 = 3187
5/18/06 = 3310
Sonoma Valley listing progression
2/14/06 = 172
2/14/06 = 183
2/24/06 = 193
2/25/06 = 200
2/27/06 = 214
3/01/06 = 219
3/04/06 = 220
3/12/06 = 230
3/20/06 = 236
3/26/06 = 238
4/03/06 = 268
4/19/06 = 291
4/25/06 = 305
4/30/06 = 315
5/07/06 = 328
5/13/06 = 346
5/18/06 = 363
"And it now takes more than twice as long to sell the typical home. A home took 38 days to sell on average in April, compared with 15 days a year ago."
Come now honey, let's tell the truth now.
According to rereport.com's April Data for Sonoma County the average count for Days on the Market is: 85. In April of 2005 it was 59
In Sonoma: 100
Glen Ellen: 217
Santa Rosa: 90
Rohnert Park: 69
"Increasingly, sellers must reduce their prices to attract buyers, agents and brokers said."Last year people got more than their asking price. This year it doesn't look like that and people need to price accordingly," said Rick Laws, Santa Rosa manager for Coldwell Banker, which prepares the monthly Press Democrat home sales report."
Right... according to Ziprealty the number of houses with recent price reductions is: 803
'"Buyers are expecting some concessions and some bargaining. This is what we would expect to see in a normal marketplace," Laws said."
Actually, I don't know about you, but I expect to see more normal pricing in a normal marketplace. You know, one where the average person in the area can actually afford to buy a house?
"Sellers are finding it increasingly difficult to make their homes stand out in the crowded marketplace. Coldwell Banker agents Jeanne and John Delario offered $100 as a business card raffle prize just to get agents to stop by the northwest Santa Rosa home they listed this week. The raffle attracted a number of agents to walk through the freshly remodeled home, one of 60 on Tuesday's weekly tour of new listings in Santa Rosa."
'"In a market like this, you want to bring the agents in to see the house so they remember it. An agent can't see 60 houses in one tour," she said. Agents rarely needed such promotions a year ago. But today, agents rely on such tours to take the market's pulse, determining if a listing is priced to sell and what buyers might expect to pay."
"The Delarios also went by a handful of homes on the tour. "It's not a poor market. It's just balancing now," she said."
"After a sluggish winter, sales picked up this spring, as they often do when more buyers and sellers enter the market. But over the first four months of 2006, sales were running nearly 18 percent below the pace from a year ago. The 382 sales in April were the fewest for the month in five years."
380 homes were sold in April of 2006 compared with 504 for April 2005.
"Back then, the economy was headed into a recession. But home sales rebounded as mortgage rates dropped to historic lows, fueling record price increases that peaked at $619,000 in August. By last fall, however, buyers became increasingly cautious about the market's direction and sales slowed."
"Buyers were waiting for prices to ease or were pushed out of the market by rising interest rates that made homes even less affordable.The average interest rate for a 30-year, fixed-rate loan was 6.58 percent last week, up from 5.77 percent a year ago, according to Freddie Mac, the national mortgage company."
"The rate hike has added $252 to the monthly mortgage payment on a $600,000 home, pushing it up to $3,059 a month."
This is quite a bit more than what one would pay to rent the same property. Considering 900sq. ft. chit boxes are priced at $600k how many of you would really rent a 2bd/1ba 900sq.ft converted chicken coop for $3,059 a month?
"That assumes the buyer took out a 30-year loan with a 20 percent down payment."
BWAHAHAHAHAHHAHAHAHA!!!!! Here is what the REAL loan breakdown looks like for Sonoma County....again...
Percentage of home buyers choosing adjustable-rate mortgages
2003 - 36.8%
2004 - 59.4%
2005 - 69%
Accoording to a local Countrywide representative he said nearly 80% of his customers are choosing Interest Only Negative Amortization Loans. Not good Sonoma County.
"The market slowdown has resulted in prices' leveling. (we call that stagnating, since so few are actually selling) The March and April median prices were unchanged from a year ago. Homes might sell for $5,000 to $10,000 under what the same homes would have gone for a year ago, agents and brokers said."
(unless you are smart enough to hit the internet and do a little research in Ziprealty and calculate the price reductions and the listing history and see that many actually have reduced titanic prices to merely ridiculously overpriced now. Check it out for yourself price reduced lists on the side bar)
"What I'm telling my sellers is, 'Be patient, it's going to happen. We just need to get people in the houses. Once we have people that are very interested, they should sell,'" Garrett said.
"Buyers have more homes to select from than at any time in the past nine years.Inventories have built back to a more than four-month supply in April, which is a measurement of how long the supply would last at the current sales pace."
MLS Listings: 3310
At the current rate of sales: 380 this translates into an 8.7 month supply of homes on the market.
"A market is considered in balance when inventories are in the four- to six-month range."
'"I explain to people the market's not bad, it's just kind of leveling off. Sellers are starting to get it," said Pat Avila, an agent with Windermere Wine Country Properties who has sold homes in the county for three decades."
Considering buyers still think they are entitled to the speculation fueled imaginary 20% gains for the past 4 years, I would say no... no the sellers arent' starting to get it. When housing prices revert to the mean of what is realistic, then they will get it.
The Wall Street Journal Real Estate Q&A (courtesy of Ben again)
“Question: Why is it so hard to get good data on housing-market prices, especially in major metro areas like Washington, D.C.? Are there no reliable indexes? I disagree that Realtors will help much, even for information on price cuts in your target neighborhood. Most Realtors just want to sell houses, and ‘now’ is always the best time to buy.”
“Answer: Wouldn’t it be great if you could get all of the information you need to buy and sell your home on one free Web site? Don’t get me wrong, there’s a lot more useful real-estate-listing information floating around in cyberspace than there was even two years ago. But much of it is controlled by Realtors, who, as you have pointed out, seemingly don’t want anything but ‘happy news’ getting out, and don’t really want consumers to be empowered.”