Sales Will Decline, Foreclosures Will Rise
State of the Housing Market 02/04/07
Sonoma Valley MLS = 269 (many previously listed houses are now on the rental list)
Price Reduced = 100
Foreclosures = 45
Sonoma County MLS = 2854
Price Reduced = 917
Foreclosures = 543 (from foreclosure.com)
746 Rentals posted on Craig's list
Sonoma Valley rentals posted on Craig's list = 73
Santa Rosa rentals on craig's list = 300
Rohnert Park/Cotati rentals on craig's list = 109
Petaluma rentals on craig's list = 114
Sebastopol rentals on craig's list = 52
Russian River area rentals on craig's list = 57
Healdsburg/Windsor rentals on craig's list = 41
"Overall, sales of existing homes will decline 7 percent across California this year, Leslie Appleton-Young told local business leaders Thursday at the annual North Bay Economic Outlook Conference in Rohnert Park."
"Prices will likely stay flat in the Bay Area for the next 18 months, she said. Statewide, prices will decline 2 percent next year, she said."
"But Sonoma County will take longer to recover because of a recent exodus of jobs in the county, said Leslie Appleton-Young, chief economist for the California Association of Realtors."
"In other parts of the state, the slowdown is driven by an excess of homes, especially in the Central Valley. But in Sonoma County, the housing slump will be prolonged by job losses."
"The county has lost 2,000 jobs over the past year, primarily in tech manufacturing, retail stores and restaurants, according to fourth-quarter figures provided by the state Employment Development Department. The erosion of jobs in Sonoma County will likely impact sales of low- and midpriced homes the most."
'"Real estate is the Achilles' heel of the California economy," Appleton-Young said."
"Houses in California cost nearly triple the national average. And residents in the San Francisco area spend 41 percent of their income on mortgage payments, compared to the national average of 22 percent."People are spending more of their incomes," she said. "Budgets are stretched."'
"Consumer spending has slowed because fewer people are taking equity out of their homes and using it as disposable income. And the real estate industry will continue to shed jobs during the slowdown, she said."
"The result is a surge in foreclosure activity, which almost doubled in 2006. Lenders sent default notices to 913 Sonoma County homeowners who fell behind on their mortgages last year, up from 540 in 2005."
"Much of the foreclosure activity is concentrated among first-time buyers who purchased homes priced at the lower end of the market, said Michael Madsen, senior loan consultant with The Madsen-Shaw Home Loans Group. Many have seen their monthly mortgage payments soar in the past year because they used adjustable-rate loans to purchase homes they could otherwise not afford."
"Appleton-Young agreed that foreclosures will continue to rise."
"New home sales tumbled nearly 50% in Sonoma County last year, while the average price dropped 12.9%"
"Home sales have been falling because buyers are worried about overpaying for houses with prices sliding. In addition, fewer can afford monthly mortgage payments despite recent price declines and lenders are tightening standards to qualify for loans."
"Building permits for homes and apartments in Sonoma County fell 35% last year ."
"Sonoma County builders slammed the brakes on housing starts in 2006 as the market slowed."