Friday, November 23, 2007

El Dorado County sales drop off chart

The median price for a county home closing escrow last month, slipped below $400,000 for the first time since April of 2004. October’s $389,500 median price was an 8 percent decrease from September and nearly a 15 percent drop from October of 2006. The monthly price decline can be attributed to a stepped up interest in homes priced under $350,000. Last month 35 percent of all homes sold were priced under $350,000 and 52 percent of all sales were below $400,000. While first-time homebuyers were rediscovering El Dorado County, the number of home sales above $750,000 accounted for only 8 percent of all sales. When comparing the first 10 months of this year to last year, our median price of $463,000 is 7 percent down.

The 124 total residential sales reported by the El Dorado County Association of Realtors, was a slight increase from September’s 115 but 14 percent below October of 2006. Historically October sales will average 200 sales. Last month was the worst October for the number of house sales since 1995. With the holidays and winter on the way, October may well be our most active month until spring.

The El Dorado Hills area has 453 homes currently listed for sale, 21 properties sold last month for an average price of $664,600. Of the five county homes that closed escrow last month in excess of a million dollars, four were in ED Hills. At the current sales rate, the area will have a 2-year supply of homes for sale by the end of the year. The area accounts for twenty-eight percent of all county sales and 30 percent of all homes currently listed.

Cameron Park has 182 homes for sale. The areas average selling priced nose-dived below $400,000 last month to $390,600. The 21 local sales were nearly the same as in October of 2006 but the average price fell $95,000. The area has 12 percent of all the homes listed for sale and 17 percent of all county home sales.

The third most active real estate area in the county was the Greater Placerville area, which reported 14 sales at an average price of $386,250. Sales gently settled from the 16 sales a year earlier but the average price fell like a rock, down $118,000. There are currently 165 homes listed for sale, which accounts for 11 percent of the county’s home inventory and 9 percent of the county’s sales.

All other zip codes in the county reported single digit sales numbers for the month including: Shingle Springs with 7 sales for an average closing price of $664,000, Diamond Springs/El Dorado reported 9 sales for an average price of $373,000, Pollock Pines/Sly Park had 7 sales for the month with an average escrow at $277,100, Georgetown/Garden Valley had 6 sales with an average price of $226,300 and Cool/Pilot Hill reported 5 sales with an average price of $426,400.

There are fewer homes getting listed but still too many for the measly number of sales. Last month’s 309 new residential listings were the lowest number of new listings since December of 2006 but with monthly sales hovering below 150, the county has 10 months of available inventory provided no other homes go up for sale.

Sellers should follow the lead of several regional builders who have decided to temporary close down their home building until the market improves. Pardee Homes recently halted its planned 660 home building project in Natomas. David Ragland, chief of operations for Pardee said, “We plan to re-emerge and reopen in a year or a year and a half in a market with less competition.” A good idea for anyone in the position to hold until the market improves.

There is little on the immediate horizon that favors area home sellers who are faced with the decision of waiting out our market malaise or dropping their price substantially to attract a buyer. Homebuyers who have been patiently waiting on the sidelines received a wakeup call from the Federal Reserve last week.

The Fed conducted a survey in October of a number of national lenders who supply approximately 75 percent of all residential mortgage loans. The survey found that 41 percent have tightened their lending requirements either “considerably” or “somewhat” for the best qualified borrowers while 60 percent had even more stringent lending requirements for non-traditional or Alt-A mortgages. Forty of the 49 banks surveyed are no longer offering subprime loans.
It doesn’t do much good to close the barn door after the horses have run for the pasture. Lenders are attempting to close the door on their excessive liberal lending policies of the past by making it more difficult for today’s homebuyers to qualify for a loan. In so doing, they are hurting recovery efforts. First time homebuyers will be the key to the real estate market’s recovery but they will need reasonable and not reactionary consideration for a loan.


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