Monday, August 21, 2006

July's heat cools sales"

The two most important statistics that I review each month from the El Dorado County Board of Realtors is the number of county home sales and their average/median-selling price. The Board publishes this valuable six-page report on their web site at www.edcar.org and the detailed analysis of different market segments provides a historical perspective on the county’s real estate market. The numbers are vital in determining the direction of the market and its pace.

Monthly home sales continue to be off by a third from last year’s volume. The 174 county sales were a decline of 33 percent from July of last year and a 22 percent decrease from June of this year. It was this year’s slowest sales month since February and the worst July since 1997. Traditionally, July is one of the most active sales months. This year will go down as being one of the slowest. If the record heat wave was responsible for homebuyers not venturing too far from their air conditioner, August will be a better month but if August’s sales are also depressed, it’s going to be a long lonely fall and winter for many sellers and their agents.

While sales are way off from a year ago, the homes that are selling are more expensive. The average monthly selling price of a county home continued its positive trend to a record high of $580,000 and remains $35,000 higher than last year. The median selling price, of $499,500 has been declining from its high of $525,000 in April. So while the average selling price continues to increase, the median selling price is falling. What’s up with that?

The median selling price reflects the numerical halfway price point between the highest and lowest priced homes sold. The average is a result of dividing the sum of all home sales by the total number of sales. An increasing average price and a decreasing median, indicates a large number of expensive homes are selling. A closer examination of the home sales last month shows there were 15 homes that had a selling price over a million bucks. It was the highest number of million-dollar home sales to be reported in a single month.

Million dollar homebuyers are currently trolling for bargains in El Dorado County. Luxury and estate buyers are not as affected by the interest rate increases as are first-time buyers. They usually don’t need to sell a home in order to buy another and they have large cash resources available. They are good opportunist and recognize quality. Million dollar homebuyers have discovered rural El Dorado County. A year ago the few million dollar sales centered in El Dorado Hills. Last month, 9 of 15 were located in more rural areas of the county.

The number of available homes for sale remains at an all time high but the rate of increasing inventory appears to be easing. The 494 new listings to hit the market in July was 47 percent higher than July of ‘05 but fewer in number than were listed during May and June. Still, the total number of homes for sale last month was 1,854 and 61 percent higher than this time last year.

El Dorado Hills has 500 homes on the market. Fifty-two sold last month for an average selling price $701,500, which was $57,000 less than July of last year. Cameron Park has 240 homes for sale, sold 34, for an average selling price of $560,600, which was $120,000 higher than this time last year. The Placerville area currently has 200 homes on the market, 21 sales were reported for an average selling price of $540,000 and $120,000 above July of 2005. There are 80 homes for sale in Shingle Springs and 109 in the Diamond Springs/El Dorado Area. Nine sold in Shingle Springs with an average price of $701,000 and 8 sold in Diamond Springs/El Dorado with an average price of $420,000. Pollock Pines/Sly Park had only 17 sales on an inventory of 184 listed homes. Their average selling price was $30,000 below last year at $342,000. Cool/Pilot Hill has 88 homes for sale, the area reported only 8 homes selling during the month and their average price tag was down $52,000 from last year.

What a difference a year makes. In July of 2005 there was a 4-month supply of homes on the market. It has since stretched to a 10.6-month supply. Will it continue to increase? Yes, as long as 500 homes go on the market each month and an average of only 200 of them sell. The time it takes to sell a home is going to s---t----r----e----c-----h…. as has this report.

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