From the Sacramento Bee:
Buyers are back.
Months of plummeting prices and droves of discounted, bank-owned properties turned April into one of the Sacramento region’s best months for home sales in nearly a year, DataQuick Information Systems reported Monday.
Three counties – Sacramento, Sutter and Yuba – broke out of an entrenched sales slump, posting more home purchases than in April 2007.
It was the first time sales had broken the 3,000 barrier since June 2007 in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties combined, according to La Jolla-based DataQuick. Overall, 3,163 homes closed escrow.
April also produced the first year-over-year sales gains in Sacramento County in 37 months.
The numbers confirm what many in the real estate industry have been saying in recent weeks: There’s been a spate of buying. And, sellers are getting multiple offers for discounted properties, especially those owned by banks due to foreclosure.
What’s driving the buying spree? Prices, primarily, which have dropped as much as one-third in the past year and are still falling as banks aggressively price thousands of bank repos.
It’s also become easier to get financing, especially for those with good credit.
Who are the buyers? They are “entry-level (buyers), investors and some ‘normal’ buyers who have been fence sitters,” said Randy Dunham, a Gold River-based real estate agent with ReMax Gold. “Everybody’s trying to pick the bottom.”
Price is motivating many who had held back.
“There are people with a lot of money who didn’t buy houses two and three years ago,” said Carlos Kozlowski, a Sacramento-based Coldwell Banker real estate agent. “Now prices are back to 2003 and 2004 levels. (It’s) irresistible.”
Meanwhile, for-sale inventory in El Dorado, Placer, Sacramento and Yolo counties fell for an eighth straight month as buyers gobbled up bank foreclosures and would-be sellers continued to wait for prices to improve.
Even so, with 12,000-plus “For Sale” signs in the region, the market hasn’t yet reached bottom, said ReMax’s Dunham.
At month’s end there were 12,606 homes for sale in El Dorado, Placer, Sacramento and Yolo counties, according to Sacramento-based researcher TrendGraphix. The peak in August 2007 was 16,262.
While falling prices have made happy hunting for buyers, it’s grueling for sellers who have to compete with discounted bank repos.
“It was a terrible market,” said Sacramentan Roy Amerine, who closed escrow in April on his Campus Commons residence, which had been on the market since January.
“We started at about $360,000 or $380,000, and made several drops of either $10,000 or $20,000,” he said, before selling for $310,000. “I was relieved, finally, to sell the property. It was just real stressful.”
In Sacramento County, sales of new and existing homes totaled 1,961 in April, the highest since September 2006, according to DataQuick.
The tally was 26.3 percent higher than April 2007 – the first time year-over-year sales had gained since March 2005, DataQuick reported. Yuba County posted a 23.3 percent year-over-year gain, its first in several years. Sutter County posted a 1.1 percent gain, its first in almost a year.
Elsewhere, sales were slower. Yolo County’s tally of new and existing home sales was down about 1.1 percent from the period last year – after mostly double-digit monthly declines since the region’s housing boom began losing steam in late 2005.
Sales in Placer County remained 8.5 percent below April 2007, according to DataQuick.
Median sales prices – where half the homes sell for more and half for less – are down year over year in the eight counties, ranging from 6.2 percent in Nevada County to Sacramento County’s 32.1 percent. Sacramento’s median sales price in April fell to $232,000 – 40 percent off its August 2005 high of $387,000.
The Sacramento Association of Realtors reported that a third of all sales in April in the county and the city of West Sacramento were for homes priced below $200,000.
“Borrowers are more cautious about what they can afford,” said Michele Dillingham, a senior loan consultant at Sacramento-based Vitek Mortgage. “A lot of people are buying at below what they would qualify for. They saw what happened (with foreclosures) and don’t want it to happen to them.”
Placer County’s median price in April was $352,000 – roughly equal to the median back in October 2003, according to DataQuick. Prices for new and existing homes combined in Placer County are down nearly 22 percent from a year ago and down about one-third from an August 2005 high of $525,000.
Only about 3 percent of sales in the suburban county were for homes below $200,000, according to the Placer County Association of Realtors.
The current real estate market in Sacramento can be very confusing. Sales continue to rise, but prices continue to fall. The figures for July are in and seem to just add to the confusion. But there is one very obvious reason that the market continues to confound: bank-owned foreclosure properties.