Downturn Hit Harder & Faster...
"Lockboxes hang from front door handles. Some houses are obviously empty, though lawns and shrubs remain well groomed. Others are immaculately staged with plush furniture, lavish drapes and homey touches."
'"Price reduced" and "price reduction" are common inducements on the signs in front."
"It is a scene repeated across Sonoma County, from neighborhood to neighborhood, cul-de-sac to cul-de-sac. Behind those for sale signs are sellers who have put their lives on hold as a market that stayed red hot for so long has turned cold."
"And for every owner, the cooling trend could influence a lifestyle built on the financial bedrock of their home. As homes rocketed in value, the new riches changed spending habits."
"Once viewed simply as shelter and a piggy bank for a modest retirement, the home became the path to a financial windfall. As interest rates fell and home sales rose, values went up and deals abounded to draw money out of homes like an ATM for cars, remodeling projects and other consumer spending."
"Some forgot that home prices could go down, as they did in Sonoma County in 1993 and 1994, when prices dropped a total of 4.2 percent over those two years. That downturn lasted four years."
"Now the market has reached a kind of psychological standoff, withsellers reluctant to accept the reality of falling prices and buyers holding onto the expectation of even deeper cuts. Now, homeowners face an uncertain future."
"Selling a home in Sonoma County is more challenging than at any time in the past decade. Sales dropped to an 11-year low and homes on the market climbed to a 10-year high in the latest Press Democrat monthly sales report."
"The housing downturn has hit harder and taken hold faster than expected, catching many homeowners off guard and forcing price cuts as they wait months for homes to sell."
"Gone are the days of selling a home in a week or two in Sonoma County."
"And no more are the days of pricing a home a percent or two above what the neighbor's house sold for a month earlier."
"Homeowners are hanging onto what one broker describes as mental equity - the price a house might have sold for several months or even a year ago. "A year ago, you got away with murder. You sold a house no matter the condition," said Sandy Geary, broker and owner of Remax North Bay Realty in Rohnert Park."
'"Buyers have almost too much choice. I have buyers who come back and every week something is cheaper," Geary said.Price cutting is accelerating. About 50 sellers on average each day reduce prices on listings in Sonoma County."
"A better strategy is to set the initial price under comparable homes in the same neighborhood. Even then, prepare to wait two to four months for an offer that still could be for less money."
"A year ago, buyers were jumping into homes. Very low interest rates and an array of adjustable and interest-only loans often allowed first-time and move-up buyers alike to buy more expensive homes once out of reach."
"Buyers aren't finding the financing deals available a year ago and more buyers no longer can afford to purchase a home because monthly mortgage payments are more expensive."
"There also are fears the house they buy today might go down in value just months later.So there has been a sort of stalemate between buyers and sellers."
"It is a change reflected not only on the North Coast, but across California and the nation. Sales are in steep decline and supplies of unsold homes are mounting, particularly on the coasts where housing inflation has been most dramatic."
'"Today's market is slowing as sellers maintain often unrealistic pricing expectations and buyers have more properties to choose from," said Vince Malta, president of the California Association of Realtors."