Thursday, 02 December 2021

Buyers continue to benefit in changing market

KELSEYVILLE – With continuing pressure on sellers to be more realistic in their pricing, and lower interest rates, Lake County home buyers are in a situation that few would have even dreamed of just a year ago.


"These are the good old days that buyers will be talking about for years to come," said Phil Smoley, broker owner of CPS Country Air Properties.


Increased inventory and more motivated sellers have created a bargain rich environment for buyers, yet many are still sitting on the sidelines.


Home sales decreased 14.9 percent in January in Lake County compared with the same period a year ago, while the median price of an existing home fell 22 percent according to information gathered from the Lake County Multiple Listing Service (MLS).


"Financing issues have dogged entry-level buyers since early 2007, but they spilled over into the middle and upper-tier markets in the last few months," said California Association Of Realtors (CAR) President William E. Brown. "The decline in sales at the upper end of the market contributed to a significant decline in the statewide median price as even well-qualified borrowers had difficulty securing financing. While it is normal for sales to decline at this time of year, regional sales fell more steeply than usual because of the ongoing liquidity crunch and tighter underwriting standards," he concluded.


Closed escrow sales of homes in Lake County totaled 40 in January according to information gathered from the MLS. This is a loss of 23 percent from December's 52 closed escrow sales; however home sales decreased 14.89 percent from the 47 sales pace recorded in January 2006.


The median price of an existing, single-family home in Lake County during January 2008 was $195,000, a 22-percent decrease from the $250,000 median for January 2007, the MLS reported. The January 2008 median price decreased 18.58 percent from December's $239,500 median price and 15.58 percent from November's $231,000.


"While the number of sales is down, prices seem to be stabilizing, which could mark the beginning of a return to a more balanced market,” said Smoley. “November and December actually showed a rise in the median price over October in Lake County. However, the rest of the state is not doing so well. Home sales decreased 33.4 percent in January in California compared with the same period a year ago, while the median price of an existing home fell 16.5 percent, according to CAR.”


"We expect further weakness in sales over the next few months as the liquidity crisis plays out," said CAR Vice President and Chief Economist Leslie Appleton-Young. "Both the state and national economies remain fundamentally sound at this time, despite recent developments in the housing market. While there have been mixed signals in recent months, economic growth is expected to continue into 2008. "It will take some time for the Federal Reserve Bank's recent reduction of the federal funds rate to have an effect on the housing market, but should result in more favorable real estate finance rates as we move through the year.”


Highlights Lake County's housing figures for January 2008:


  • Lake County's Unsold Inventory Index for homes in January 2008 was 24 months, compared with 21 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

  • Thirty-year fixed-mortgage interest rates averaged 6.10 percent during January 2008, compared with 6.14 percent in January 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.50 percent in January 2008 compared with 5.45 percent in January 2007.

  • The average number of days it took to sell a single-family home was 207 days in January 2008, compared with 176 days for the same period a year ago.


Thus while it appears that it will continue to be a buyers market for the coming months, there are signs of stability and increased buyer interest, which bodes well for sellers.


"Spring will be a tell tale measure of whether the honeymoon for buyers is over or not. But for now, it's a buyer's bonanza, and it's silly to be watching on the sidelines while so many bargains are available at great rates," Smoley concluded.


Ray Perry is a real estate agent with CPS Country Air's Kelseyville office. Visit his Web site at www.move2lakecounty.com/.


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