Sacramento-area home sales remain sluggish

Larry Doss Saturday, August 22, 2009

Sacramento-area home sales remain sluggish

By Jim Wasserman

Sales of existing homes in the Sacramento area climbed 2.6 percent from June to July – far short of the surprising 7.2 percent rise nationally that sent stocks soaring Friday.

A July report showed sales of 3,495 existing homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to San Diego-based researcher MDA DataQuick.

Buyers also closed escrow on 320 new homes to push July’s regional sales tally to 3,815, up slightly from 3,758 in June.

The rise failed by a long shot to match the U.S. sales increase from June to July. The National Association of Realtors called it the fastest monthly gain since 1999 and a sign that the market "has decisively turned for the better."

In the capital region, however, where the housing market is struggling to regain its footing, this year’s July sales were lower than the 4,126 sales reported in July 2008. By comparison, there were 2,906 area sales in July 2007 and 3,275 in July 2006. In July 2005: 6,159.

July marked the second straight month in which sales dipped below the same time a year ago. Last year a massive supply of bank repos fueled a sales boom by first-time buyers and investors. The boom has faded as repos fell to 58.7 percent of July sales, the lowest share in 15 months, DataQuick reported.

A dwindling supply of cheap repos drove Sacramento County’s median price higher – to $180,000 – in July, DataQuick reported. That’s after two months at $175,000, and well up from February’s low of $160,000 in a county that’s home to about six in 10 of the area’s home sales.

DataQuick said 38 percent of Sacramento County sales were below $150,000. Homes priced at $400,000 and higher were 6.6 percent of July sales.

Significantly, the rate of year-over-year price declines slowed in Sacramento County. July prices were 14.3 percent below July 2008. For much of the past two years Sacramento County’s median price – where half of homes sell for more and half for less – slipped 30 percent or more from the same month a year earlier.

"We’re coming off that period when we had the steepest slides," said DataQuick analyst Andrew LePage. "It’s going to get easier and easier to get to single-digit decline from a year ago unless we see foreclosures and job losses ratchet up."

Foreclosures in the region, indeed, rose in the second quarter of 2009. The unemployment rate in the region has climbed to 11.8 percent and to a record 11.9 percent in California, the state reported.

July’s median sales prices in Sacramento County are back to what they were in September 2001. Then, the county’s median household income was $44,928, according to Claritas, a demographic research company. Today, it’s $57,847, suggesting a market again well matched with incomes and even overcorrecting after its housing boom excesses.

Prices are back to October 2002 levels in Placer and Sutter counties and mid-2003 in El Dorado, Yolo and Yuba counties.

"It’s affordable by all our natural price measures," said Dean Wehrli, a Sacramento executive with San Diego-based Sullivan Group Real Estate Advisors. "I would say we’re in the middle of the overcorrection."

Wehrli said today’s median price for existing homes in Sacramento County is about the same as if the boom had not occurred and prices rose 3.4 percent a year since 2000.

But it’s still not easy to buy, complain first-timers trying to snag bargains.

"I’ve been in this since March. I’ve been outbid. I’m bidding $30,000 over the asking price. And still, cash just walked in and took it," said Dianna Starr of Sacramento. "People I know say it’s a buyer’s market. No, it’s not."

Starr, outbid by investors on several foreclosed homes in the $135,000 range is trying now to buy a short sale listing. That’s an equally frustrating problem for buyers.

In short sales, a bank agrees to a sales price below what it’s owed on the house. Complications abound.

Starr said in her case the main mortgage lender wants to sell, but lender JPMorgan Chase has balked at taking a loss on a home equity line of credit.

"I’m doing everything I can," said the medical transcriptionist at Solano State Prison. "I’m a hard-working person that can’t catch a break."

Regionally, the number of for-sale signs in El Dorado, Placer, Sacramento and Yolo counties fell for a 23rd month. Sacramento researcher TrendGraphix reported 6,572 homes on the market in the four counties as July ended, the fewest in four years.

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Based on information from the Humboldt Association of REALTORS®, as of 04/14/2024. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be verified by broker or MLS for accuracy. All information should be independently reviewed and verified of accuracy. Properties may or may not be listed by the office/agent presenting the information. Copyright ©2024 Humboldt Association of Realtors®. All rights reserved.