Resale struggles
Competition with new home builders adds to problem
Date Published: January 2008
Real Estate
In early December, the National Association of Realtors projected existing-home sales will trend up in 2008. However, they also said, "a recovery for new-home sales is unlikely before 2009."
This comment about the national real estate market directly followed "unusual mortgage disruptions that peaked in August and were clearly seen in lower home sales that were finalized in September and October."
It is clear that our regional market under-performed during this time frame. Improvement should follow, according to Lawrence Yun, NAR chief economist.
"Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months," he says.
I hope he is correct.
Looking at our regional market, I think existing home sales are affected by the large number of new homebuilders and their greater ability to rapidly adjust to market conditions. Additionally, most have shareholders to keep happy.
To be competitive, it is most important to pay attention property condition, especially curb appeal.
In South Placer County, November new sales (185) were flat compared to October (184). This is 18.5 percent fewer new sales than in November 2006.
November closed escrows (232) were 12.8 percent less than in October (266) and off 21.9 percent compared to November 2006 when 297 escrows closed. The South placer median sales price slipped from $385,000 in October to $366,087 in November which 16.8 percent less than in November 2006 ($439,974). A significant amount of this decrease is probably due to end of the year seasonality of the real estate market.
In Granite Bay, November closed sales (11) decreased slightly from October's 13 closings. This is a 21 percent decrease compared to November 2006 when 14 sellers closed escrow.
In November six sellers found buyers, a 60 percent drop compared to a year ago when 15 buyers and sellers reached an agreement. Seven sellers found buyers in the first half of December, which is slightly better than the same period in November when six homes sold.
This comment about the national real estate market directly followed "unusual mortgage disruptions that peaked in August and were clearly seen in lower home sales that were finalized in September and October."
It is clear that our regional market under-performed during this time frame. Improvement should follow, according to Lawrence Yun, NAR chief economist.
"Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months," he says.
I hope he is correct.
Looking at our regional market, I think existing home sales are affected by the large number of new homebuilders and their greater ability to rapidly adjust to market conditions. Additionally, most have shareholders to keep happy.
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The individual homeowner reacts more slowly to market conditions, which leads to resale price stickiness in a declining market. Currently in our regional market, new homes are tough competition for the individual home seller. To be competitive, it is most important to pay attention property condition, especially curb appeal.
In South Placer County, November new sales (185) were flat compared to October (184). This is 18.5 percent fewer new sales than in November 2006.
November closed escrows (232) were 12.8 percent less than in October (266) and off 21.9 percent compared to November 2006 when 297 escrows closed. The South placer median sales price slipped from $385,000 in October to $366,087 in November which 16.8 percent less than in November 2006 ($439,974). A significant amount of this decrease is probably due to end of the year seasonality of the real estate market.
In Granite Bay, November closed sales (11) decreased slightly from October's 13 closings. This is a 21 percent decrease compared to November 2006 when 14 sellers closed escrow.
In November six sellers found buyers, a 60 percent drop compared to a year ago when 15 buyers and sellers reached an agreement. Seven sellers found buyers in the first half of December, which is slightly better than the same period in November when six homes sold.
Glen Walder has been a Granite Bay resident since 1977 and a Realtor since 1992. He can be reached at glen.walder@prurealty.com.
