The Northern California real estate market continues to hold steady. Overall, median home prices remain strong and inventory remains plentiful in most areas. Many home buyers and sellers are realizing that in order to successfully buy or sell a home, they have to meet at middle ground. This market has its advantages for home buyers and sellers. Read on.
Statistics:
Statewide:
The median resale price of a single-family detached home in California for July was $586,030, an increase of 3.2% over July 2006, but down from the previous month. Unsold resale inventory represented a 10.7 month supply, compared to 7.3 months for the same period a year ago. Median number of days until sale was 52 in July, up from 48 for July 2006.
Bay Area:
Note: Please Click on the table for a larger image
Many parts of California seem to be leading a charmed life. Of the 13 regions we now track – and incidentally, hello this month to Alameda and Contra Costa Counties – eight have improved year-over-year medians, from Santa Cruz County’s almost 1% to the Bay Area’s almost 7%. Strong prices are concentrated in the most affluent and most developed areas; Northern California as a whole is down almost 10%, which means the rural counties (including the ones we don’t track separately) have to be taking the brunt of the decline. What’s happening is a readjustment in the banking and lending industries, not a recession.
Sacramento/Capitol Region:
Pollock Pines is this month’s Capitol Region standout with sales up 57%, although the median has declined 6.6%. Sales have also increased in Carmichael, Davis, El Dorado Hills, Loomis, Truckee and some areas of Citrus Heights, Roseville and Sacramento proper. Sales are steady in Antelope, Granite Bay and parts of Rocklin and Sacramento; overall, sales are level or better in 18 of the region’s zipcodes, out of 58 with 10 or more sales for July.
Interest Rates*:
The financial community was waiting for the Federal Reserve to cut the Federal funds rate, the most fundamental rate over which it has influence. Instead, the Fed left the funds rate at 5.25%, where it’s been for a long time, cut the (slightly higher) discount rate instead, but then said to the lenders, “C’mon, guys, save yourselves a little money by borrowing directly from us instead of from each other.” This self-promoting behavior from a famously conservative organization is mildly weird, and the upshot is, the funds rate is still at 5.25%, prime is still at 8.25%, and the Fed seems to be protesting deep concern while really not changing very much.
News Media:
Seemingly preoccupied with a single issue – even though subprime lending represented only a sliver of the national assets. Our advice to you is: read, analyze and form opinions.
Overall Assessment:
Not, perhaps, one that you would find elsewhere. We assess this as a market that, although diminished in size, retains some advantages. Since mortgages are now more difficult to qualify for, buyers who walk in ready to arrange loans will be financially solid. Solid buyers, in turn, will appreciate the wide selection that can be made. Remember that the reshaping of this market may have broader implications for potential sellers than for potential buyers. This is a time when care in preparation can make a crucial difference; a fixed-up house will sell more easily than a fixer-upper, staging is more worthwhile than ever and curb appeal is paramount. Discerning buyers are looking for standouts. Buyers and Sellers will all find that success is in the details…because successful details add up!
*Area interest rates are reported to be as follows:
Sacramento/Tahoe, San Francisco Bay Area and Silicon Valley regions: Princeton Capital reports that as of September 4, 2007, the 30-year fixed with one point is 7.125%, the 15-year fixed with one point is 6.875% and the 5/1 ARM with one point is 6.625%, on non-conforming loans of $500,000.
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