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Home sales tumble 27.9 percent
County median price falls to $521,250
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More from County NewsIt's difficult to imagine that home sales can fall much further, economists said Tuesday.
"We're in kind of a trough," said Mats Olson, an economist for the California Economic Forecast in Goleta. He expects a slight rebound next year.
Bill Watkins, executive director of the UC Santa Barbara Forecast Project, generally agrees. When asked if the Ventura County housing market is enduring one of its worst sales years ever, he replied: "We just had one."
Sales of new and existing houses and condominiums from January to November plunged 27.9 percent in Ventura County, compared with the same period a year ago, DataQuick Information Systems reported Tuesday. Sales are down to 8,271 from 11,478 in the first 11 months of 2006.
Sales last month stood out as the lowest total for any November in DataQuick's records, which date back to 1988. There were 516 transactions in Ventura County, down from 901, or 42.7 percent, from the same month last year.
The previous November low was 695 sales in 1990. The record low for any month is 464 in January 1991.
November marked the 24th consecutive month that Ventura County has posted year-over-year decline in sales.
Ventura County's median price fell to $521,250 in November, a 9.7 percent drop from $577,500 last year, according to the La Jolla-based real estate information service. The median is the midpoint, where half the homes sold for more and half for less.
After staying flat for about a year and a half, the county's median has retreated in recent months and is approaching the January 2005 level of $518,250. DataQuick attributes it to a sharp decline in sales of mid- to higher-priced homes that require jumbo mortgages.
"If prices start falling, we could see a pickup in sales," Watkins said.
But there's no reason for optimism, he added. Some markets have seen "severe weaknesses" in commercial real estate. Watkins said he believes California could be weaker economically than the rest of the United States for the first time in a few years.
The state's budget crisis also means the government is going to reduce spending and raise taxes, which will have a negative effect on economic growth, Watkins said.
What does that mean for the residential housing market?
"It means there's no hope for an immediate turnaround," Watkins said. "There's currently no sign that would give someone a reason to believe it would pick up."
He forecasts the general economy will bounce back in the second half of next year as inflation accelerates — both of which tend to strengthen housing prices.
If prices end 2008 where they started out in January, it would be a good year, Watkins said.
Realtor Mike Plisky says sales are off 35 percent at Aviara Real Estate in Westlake Village compared with last year, but he's seen a recent spike in activity. A lot of the buyers on the market are investors. The public is typically six months to a year behind the curve when the market shifts, Plisky said.
"This is not a great time to sell, but it's a great time to buy," he said.
He expects more price declines through the middle of next year and then expects the market to stabilize.
"We can still go lower from here," considering the credit markets are not as liquid as they were, said Gary Painter, director of research with USC Lusk Center for Real Estate. It's more difficult for people to obtain loans, which adds to the chances that prices are going to be soft, he added.
Given how long cycles can last, he predicts continued price declines in coming months. But he wouldn't characterize it as the worst overall market.
"While you're seeing a lot of people staying out of the market, you don't see as many people having to sell as they did in the early '90s," Painter said.
Painter forecasts prices will remain flat or decline slightly in 2008. He said he didn't expect any dramatic 20 percent drops followed by a rebound.
"I don't think the market will start moving up until 2010," he said.
If there is a significant 10 percent to 15 percent price drop, Painter said, he thinks it will be in areas such as the Inland Empire, where there was an influx of new construction while the market softened.
In Southern California, home prices continued to slide last month, but sales inched up from October. The median was $435,000 in November, down 10.3 percent from the same month a year ago. Sales of new and existing homes and condominiums totaled 13,173 in November, up 2 percent from October, but down 42.7 percent from last year, DataQuick reported.
Whether sales go any lower is anyone's guess, said Andrew LePage, a DataQuick analyst.
"The reason it's difficult for anybody to predict this is because nobody really knows whether the economy will go into recession, or what percent of folk who face interest rate resets on their adjustable rate loans will go into foreclosure," LePage said.
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Posted by SmashyCrashy on December 19, 2007 at 2:53 a.m. (Suggest removal)
Near the bottom in sales, we will just stay at the bottom for a very very long time. Financing is drying up faster than prices are falling.
Posted by ecarson1958 on December 19, 2007 at 5:37 a.m. (Suggest removal)
I am so bored with the same old baloney, I just don't know what to comment on anymore. "We expect things to turn around sometime next year." We'll be hearing that song and dance for the next 5 years. $500 and how ever many thousands is still a couple hundred too many. Wake up. When a house is actually worth buying only then will they stop falling. Get it?
Posted by dcsfancy on December 19, 2007 at 6:15 a.m. (Suggest removal)
Oh "I am shocked" falling prices say it isn't so.
Posted by desdave on December 19, 2007 at 6:50 a.m. (Suggest removal)
Prices well above the jumbo loan cutoff and buyer anticipation that prices will come down more mean that sales will remain flat or more likely go down more. Why would you try to sell right now unless you are one of the few that need to due to some outside factor (job move, impending foreclosure etc.). I am amazed by the number for sales near me that have had a sign up for many many months. Then every now and then the sign changes to a different realtor. Buyers got caught up in the buying frenzy that resulted in ridiculous prices, with insane financing schemes. Now the bubble has burst, just like it did with every previous cycle. Difference this time is the foreclosure mess due to the dicey loans. By the way, the new regs that congress is considering on loans are sorely needed, and will really put a crimp in questionable loans.
Posted by Face on December 19, 2007 at 7:16 a.m. (Suggest removal)
Why, this is just the beginning.
Posted by johnnybonzo on December 19, 2007 at 7:48 a.m. (Suggest removal)
Kind of a trough? Kind of a trough?!?!? What a remarkable insight!
Posted by rebel123 on December 19, 2007 at 8:30 a.m. (Suggest removal)
I have to sell my house in mid 2008. Sucks! I'm hoping the bottom falls completely out and then maybe I can buy my ex out!
Posted by SummerSun on December 19, 2007 at 10:44 a.m. (Suggest removal)
Things are just adjusting to real prices. Salaries sure didn't match the price of homes, and to get in one, people didn't care they couldn't afford a convential loan, and went for those risky subprimes. Welcome to reality.
Posted by tsu.lee on December 19, 2007 at 11:06 a.m. (Suggest removal)
The price on a home will stop dropping when the cost to buy comes to be more in line with a household's income. Now what is in line with a household's (should only be the main wage earner's income IMHO) income? Well back when I was still drooling on myself as a baby the banks thought that was around 3 times your gross or less (I have heard as low as 2.3x's). If the banks start following that rule again, then housing has to fall by over 50% to come in line with the median household income.
Posted by Fred on December 19, 2007 at 2:51 p.m. (Suggest removal)
This minor adjustment is chump change compared to the radical increases of the last few years which were driven by greed, speculation, and outright fraud. The scam is up and nobody is buying with very good reason.
Posted by techscan on December 19, 2007 at 6:03 p.m. (Suggest removal)
<i>"If prices start rising, we could see a fall off in sales."</i>
Does that sound stupid? Of course it does. We've seen falling prices for equivalent properties for nigh on two years all in a context of falling sales volume. Yet when an 'expert' intones; "If prices start falling, we could see a pickup in sales." It is reported as authoritative in the Ventura County Star. The Star needs to start quoting the people who have been calling the housing market spot on for the last 30 months rather than those who have been worse than wrong for at least that long.
Posted by Tyrone on December 20, 2007 at 8:22 a.m. (Suggest removal)
"but it's a great time to buy"
No, it's not. We have a long way to drop. The drop will take a few years--this is basically a purging of the exotic financing used by those that could not afford homes, and, ironically, which drove prices UP.
Posted by Fred on December 20, 2007 at 2:19 p.m. (Suggest removal)
Now, now Tyrone,
You are challenging highly trained professionals that only have your best interests in mind - how can you not trust "it's a great time to buy"??
(except that maybe the scumbag realtors have NEVER said it is not a great time to buy - when prices are going up, the say "buy now or be priced out forever" and when going down "we must be at the bottom, just look at the unprecedented selection and deals")
Posted by daleeks on December 21, 2007 at 6:58 p.m. (Suggest removal)
'Realtor Mike Plisky says sales are off 35 percent at Aviara Real Estate in Westlake Village compared with last year, but he's seen a recent spike in activity. A lot of the buyers on the market are investors. The public is typically six months to a year behind the curve when the market shifts, Plisky said.'
These are not real investors but emotionally driven seminar participants. Anybody with any analytical skill at all knows we are several years from any kind of bottom. Real investors will start coming in in 2009 or 2010 and many of those "investors" buying now will be contributing to the foreclosure tsunami that will peak in about 2 years.
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