Slower Regional Sales

Existing home sales in the Capital Region during the month of March, declined sharply from a year earlier. Home sales for the region totaled 2,500 but it was the slowest March since 1999 and down by 29 percent from last year according to DataQuick Information Systems.

While the number of monthly sales declined in all four counties the average price of a home remains above last year. Homes in El Dorado County sold for 13 percent more than they did in March of 2005. Placer County’s home prices were up 6 percent, Sacramento County up 8 percent and Yolo County up 8 percent.

The number of homes for sale continued to increase. In March of 2005 the region had 3,800 homes with a “For Sale” sign in their front yard. Last month the number of listings had swelled to 10,300.

Will the excess of housing inventory decline as we move into the traditional home buying season this summer? Will prices hold above last year’s level? If employment remains strong and interest rates stay under 7 percent, sales will pick up. Not to last year’s level. The 29 days of rain during March didn’t help. A lot of homes came on the market early over the last four months. I expect April will be the peak for new inventory and then we will see a decline in the rate of increase.

Many investors and flippers have been liquidating. It takes a few months for that inventory to work its way through the system. Sellers and agents are also becoming more realistic on their price expectations. April will be a pivotal month.