Negative Appreciation for Sonoma County
"Home sales fell sharply nationwide during the second quarter of the year, and California showed the third biggest drop of any state, a Realtors group reported Tuesday. "
"The Realtors group found that volume slowed the most in precisely those states where sales had been hottest. Only Arizona and Florida posted a greater decline than California."
"Realtors association spokesman Walter Molony said the second quarter's results amounted to the slowest pace of quarterly sales in California since the first three months of 1996."
"The pattern of slowing home sales and flattening prices is typical when booms in the housing market end. The nation in general and California in particular are coming out of one of the strongest housing surges in recent history, owing to mortgage rates that dropped to near-record-low levels."
"Economists said it's natural, with rates rising, for sales to slow down."
"Vince Malta, president of the California Association of Realtors, said the sales slowdown, combined with the low, single-digit price increases, suggest that the state's real estate market is in a period of adjustment. The duration and result of that shift can only be guessed, he said."
"David Berson, chief economist for mortgage giant Fannie Mae, said he sees worrisome trends that suggest continued downward pressure on sales and prices from coast to coast."
"For one thing, the inventory of unsold homes on a nationwide level has risen. Berson said that, at the current pace of sales, it would take seven months to sell off all the single-family homes now on the market. From 1999 through 2005, this same indicator averaged 4.5 months."
"Berson said that in many locales, existing sellers also will have to compete with a large number of unsold new homes, roughly 570,000 nationwide as of June."
"We've never had more (new) homes for sale," he said.
"Perhaps the biggest unknown is what happens to the large numbers of so-called nontraditional mortgages -- often favored by new buyers in high-priced places such as the Bay Area -- as interest rates rise, Berson said. Such loans often have features that cause big increases in monthly mortgage payments."
"There could be some sort of payment shock when these things adjust upward," he said.
"The median price for single-family homes in Sonoma County fell 3.6% in July from the month before to $592,500. This is 2.9% lower than last July, and the first time since we've been keeping records, January 1999, annual appreciation has been negative."
Sales plummeted in July, down 21.4% from June, and down 40% from last July.
Sonoma County Home Sales:
July 2006: 338
June 2006: 430
July 2005: 563
Condo sales also fell sharply, down 27.8% compared to June, down 52.1% year-over-year. Rereport.com says this is not a trend.
Sonoma Valley July Sales Statistics:
Homes Sold: 25
Down YOY -34.2%
Condos Sold: 4
Down YOY -60.0%
Sonoma Valley June Sales Statistics
Homes Sold: 36
Down YOY -35.7%
Condos Sold: 3
Down YOY -57.1
Sonoma County MLS: 4298
At the current rate of sales this translates into a 12.71 month supply of homes for sale. This number only represents existing homes on the market, and does not include newly built homes.
# on Price Reduced List: 1502
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
8/10/06 = 4072
8/16/06 = 4298
Sonoma Valley MLS: 487
At the current rate of sales, this translates into a 13.91 month supply of homes for sale. This number only reflects existing homes on the market, and does not factor in newly built homes.
# on Price Reduced List: 173
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
8/10/06 = 471
8/16/06 = 487
Associated Press. “The slowdown in the once-sizzling housing market is spreading, with 29 states reporting spring sales declines, led by big drops in former boom areas of Arizona, Florida and California."
“The five biggest declines this spring compared to the April-June period of 2005 were Arizona, down 26.9 percent; Florida, down 26.7 percent; California, down 25.3 percent; Virginia, down 23.9 percent, and Nevada, down 23.5 percent.”
“‘We are not near the bottom,’ said economist Christopher Thornberg, a senior economist at UCLA. ‘Anybody who bought a home in the last year and was hoping for appreciation to bail them out is in for a rude awakening,’ he said.”
From the LA Times.
“As the housing sector cools from its torrid pace, the Fed found that about 60% of respondents saw weaker demand for mortgages, which was ‘a significantly larger net fraction than in the April survey,’ the report said.”
“Nearly 30 percent of banks, on net, indicated that they expect the quality of the nontraditional residential mortgage products currently on their books will deteriorate somewhat over the next 12 months,’ the Fed survey said.”