“It seems like sales are dropping like a rock,” said Phil Smoley, owner broker of CPS Country Air Properties. “But like a bungee chord, the farther it drops the harder and faster it will rebound.”
There is no way to know how long this trend will continue. Some markets in the country have bottomed out, others are still plummeting. All indications in Lake County show that prices may have bottomed out however savvy buyers are taking advantage of the low prices while they can before prices go back up.
"Sales continue to be dragged down by the ongoing effects of both the credit/liquidity crunch and tighter underwriting standards that have reduced the pool of qualified buyers who can obtain a loan," said California Association of Realtors (CAR) President William E. Brown.
"It is crucial that FHA reform legislation currently under consideration by Congress includes higher loan limits for high-cost states like California," he said. "The proposed legislation also includes a reduction in the down payment requirement for FHA loans and will include condominiums in the FHA single-family program, which will make it easier for buyers in the condominium market to qualify for loans."
Closed escrow sales of homes in Lake County totaled 33 in March according to the MLS. Countywide home sales activity decreased 51.5 percent from March 2007.
The median price of a home in Lake County during March 2008 was $225,000, a 23.2-percent decrease from the revised $293,000 median for March 2007, the MLS reported. The March 2008 median price increased 4.8 percent compared with February’s $220,000 median price.
"The Federal Reserve Bank’s recent action to reduce the federal funds rate will have little near-term direct effect on the housing market," said CAR Vice President and Chief Economist Leslie Appleton-Young. "However, Fed rate cuts should result in more favorable real estate finance rates as we move through the year."
Highlights of Lake County’s housing figures for March 2008:
Lake County’s Unsold Inventory Index for homes in March 2008 was 31.9 months, compared with 17.4 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 5.85 percent during March 2008, compared with 6.29 percent in March 2007, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.24 percent in March 2008, compared with 5.51 percent in March 2007.
The average number of days it took to sell a single-family home was 165 days in March 2008, compared with 153 for the same period a year ago.
Ray Perry is a Realtor with CPS Country Air Properties, telephone 277-8000.
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