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Home slump near bottom, CAR says
Economist expects small drops in state median, some markets
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The darkest days of home sales and credit crunch are behind Ventura County, said Robert Kleinhenz, an economist with the California Association of Realtors.
It's too early to speak of a rebound — he expects the state's median and many markets in the state to continue to show small price declines over the next few months.
"I think we're very close to the bottom," Kleinhenz said.
A CAR report released Wednesday shows no indication of any sharp rebound in May, but none was expected, said Mark Schniepp, executive director of the California Economic Forecast Project in Goleta.
There were 363 sales of existing, single-family, detached homes in Ventura County last month, a 12.7 percent drop from a year ago and a 7.2 percent decline from 391 sales in April, according to CAR.
The median price, the point where half the homes sold for more and half for less, tumbled to $487,790 in May, down 30.3 percent from $699,480 for the same month a year ago and 1.8 percent from $496,530 in April.
The last time that the median was at this level was in December 2003, when it was $488,000.
The median's significant decline in Ventura County reflects the unavailability of jumbo loans since the credit crunch last fall, which has affected the mix of homes that are selling, Schniepp said.
For example, although not many homes in Thousand Oaks and Westlake Village are selling, values are holding steady, he said.
In Oxnard and Fillmore, the median has dropped close to 35 and 30 percent, respectively.
"You almost can't compare year-over-year yet until September, because we're in a different environment," he said.
Year-to-year sales rose significantly in several other regions, including north Santa Barbara County, 85.2 percent; Riverside/San Bernardino, 78.9 percent; Sacramento, 76 percent; High Desert, 65.5 percent; and Monterey, 39.3 percent.
Schniepp attributed the higher volume of transactions in those regions to an influx of distressed sales.
Moderately priced markets such as the High Desert, Sacramento and north Santa Barbara that have a lot of new homes have seen dramatic increases in sales activity.
However, prices in those areas fell fast and hard — as much as 44 percent — and now they are climbing out of a sales trough far deeper than other markets have had, Kleinhenz said.
San Diego County, Northern California, Santa Cruz County, Santa Barbara's South Coast, and Santa Clara and Ventura counties posted the biggest decline in sales, in that order.
Statewide, home sales last month rose above their year-ago levels, marking an increase for the second month in a row after a previous 30-month run of year-to-year declines, according to CAR.
California sales surged 18.1 percent last month, going from 358,640 last year to 423,700 this year, according to information collected by CAR from more than 90 Realtor associations in the state.
Meanwhile, the median price posted a record year-over-year drop.
In California, the median price for a home sold last month was $384,840, down 35.3 percent from $595,000 a year ago.
"Fortunately, despite these kind of adjustments in price and sales, we've still got a fairly sound economy," Kleinhenz said.
While in the 1990s, people lost their homes because they lost their jobs, that's not happening today, he said. People are losing their homes, but are typically keeping their jobs and are staying in the community as renters.
"We're looking at a market that has potential to recover more quickly than in the 1990s," he said.
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Posted by CAPEDad on June 26, 2008 at 11:58 a.m. (Suggest removal)
"I think we're very close to the bottom," Kleinhenz said.
Never forget - to be a CAR/NAR economist, the first requirement is to check your dignity at the door. These folks would sell out their own mothers to keep the commissions coming.
I think it would be very beneficial to the Star readers if Ms. Mintz would provide a chronology of Mr. Kleinhenz's 'forecasts' and the corresponding median price at the time of each forecast. I like a good laugh. Price per square foot needs to get down near $250 for any reasonable valuation.
CAR economist = Clown
Posted by surfing93035 on June 26, 2008 at 12:01 p.m. (Suggest removal)
"All Is well, remain Calm"~~Kevin Bacon from Animal House 1980...Of course CAR will present a rosy future..what shock. Funny, the owner of the home I rent just informed me that their loan just adjusted from $2500 to $4800, this month..can you say "Short Sale" or just another foreclosure!
Posted by CAPEDad on June 26, 2008 at 12:19 p.m. (Suggest removal)
Yes surfing93035, There are MANY more option-arms that are about ready to explode. When they reset in the coming year, there will be a lot more REOs/shorts on the market. I hope your landlord survives. Needless to say, she is backwards on a cash flow basis.
What I hate about the CAR/NAR headliners is that they give a bad name to honest realtors (there are a few). These economists lie somewhere below whale s#*t.
Posted by ridgewalker101 on June 26, 2008 at 2:12 p.m. (Suggest removal)
These are the same idiots that were saying now is the perfect time to buy in 2005. Hurry up or be priced out forever.
Looks like a lot of people are priced in forever now !
Posted by marcbroberg on June 26, 2008 at 4:16 p.m. (Suggest removal)
Is it just me or does CAR say "this is the bottom" every time a new report is posted? Aren't these the same folks that also said "there is no real estate bubble"?
Posted by Rob_Dawg on June 27, 2008 at 8:13 a.m. (Suggest removal)
In 2000 the median home cost 4.5x the median household income. Provided we return to that ratio and do not overshoot as is so common in corrections then the median home should cost $280,000. With the median down 30.3% remember it would take a 43.5% increase to recover those losses.
The residents of Ventura County should congratulate themselves on the foresight in enacting rational growth management policies that prevented the aarea from going the way of the Inland Empire, Orange County and Antelope Valley with massive overbuilding.
Posted by SmashyCrashy on June 28, 2008 at 6:30 a.m. (Suggest removal)
I think people (not you RD) take the 4.5 times median income and think that they can spend 4.5 times their income on a home. That isn't true, the ratio is about 2.5x-3.0x depending on where interest rates are. The reason the county median priced home to median income is higher than this is that few median income families can afford a home and that skews this number higher.
Posted by ridewp on June 28, 2008 at 2:36 p.m. (Suggest removal)
This market's seen more bottoms than a delivery room nurse. Can't wait 'till next year's bottom, and then next year's bottom, then next year's bottom..... like a quarter dropping from a stairway. Fun to watch!
Posted by freethought on June 30, 2008 at 8:02 a.m. (Suggest removal)
Kleinhenz said, "Fortunately, despite these kind of adjustments in price and sales, we've still got a fairly sound economy,"
After the "we're at the bottom" bull statement, you'd ask yourself, "How could he be more wrong?" The above statement shows exactly how. Maybe he's talking about the overall economy in Oz or Valhalla, because our economy is falling straight to heck in a handbasket.
Mr. Kleinhenz, you'll have to drink all that kool-aid yourself. None of us will be buying any.
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