billddrummer

Home Price Declines, But Not Everywhere [Housing Tracker]

Hi Judy,

Interesting compilation, a terrific resource.

Commentary about the CA housing market is interesting. Home sales are up (if youannualize one month's sales activity) but median prices are down, driven by distressed properties sold off by banks.

The article says that inventory on hand is down from 10 months to 6.7 months. That's the good news. It also says that the average marketing time shrank from 50.7 days to 47.5 days. And a telling comment about Santa Barbara County buried in the footnotes--'a disproportionate number of lower priced homes' sold, thus pushing the median down in June, and accounting for its rapid rise in July.

Here's my take on it:

Santa Barbara County is at the edge of the bubble. I think sales are up over last year because there was virtually no mortgage money available. (If you recall, more than 100 private lenders failed in 2007, the secondary market dried up for MBSs, and CDOs, and exotic mortgage products vanished. This year, the news is all about foreclosures, stemming from loans made during the bubble frenzy.) Now, with the conforming loan limit raised to $729,000, but lenders requiring income and asset documentation, homes are selling, but for much less than they commanded a year ago. And there are waves of homes entering the markets as REOs, that were sold with exotic mortgage money 2 years ago. As I've said repeatedly, it's a series of levers that impact the housing market--affordability, availability of mortgage money, inventory, the ratio of distressed properties sold, and seasonality. July was the last month people would have bought homes before school started. Now that summer is over, look for sales to fall even further, as families with children in school elect to 'wait it out for another year, and see what happens after the elections.'

Keep up the good work. I appreciate all your efforts!