Some market info

The news in the real estate world seems to perplex the pundits at a national level and confuses us if we try to make sense of their interpretations. Existing home sales are down, frighteningly so, new home sales are up, encouragingly so. So they say. Median home prices are down, or up, depending on where you live. The median home price nationally is around $220,000, and we just don't have a whole bunch of those in Chico. To make some sense of what's happening it requires looking at the actual events. New home sales are up because the national developers are slashing prices in a big way. They must reduce their inventory, so even though they sell at a modest loss it's better than suffering a continuing drain on their underlying financing. (That's true locally as well, in the Orland area, where homes are selling at sharp reductions from the anticipated pricing.) Existing home sales are down and inventory nationally is pegged at an 8+ month supply. Two reasons probably. First a slight tightening of credit standards, some 76 lenders, mostly sub-prime, have folded their tents since late 2006, so some caution has been injected into the market. Second and main reason is the reluctance of sellers to recognize their home is simply not worth what they hoped it was. In our local market MLS listed home sales for April totalled 87 for Chico, add 36 more for Paradise and Magalia, for April, 2006 it was 66 and 48, and for April, 2005, 108 and 75. Listed properties, (these are all single family home figures) total a whopping 541 for Chico and 383 for Paradise and Magalia. Remember, these are MLS figures and do not count private sales or properties being sold privately. The increase in listed properties may well be an attempt to take advantage of the normal seasonal increase in buying activity. If pricing is not aggressive however, the market forces at work, including higher gas and food prices will militate against any buying surge.
One of the surprises for me is the listing activity that is passing by our offices. We know we can't get all of them, but why any informed person would pay a great deal more money for exactly the same or inferior service simply baffles me. Maybe the operative word is informed and we need to step up our advertising, or maybe our business model simply seems too good to be true. But then so did Costco and Schwab in the merchandise and securities fields.
Just so this recitation of events doesn't seem too doom and gloomy, our web site activity is up, meaning people are looking and are presumably looking for opportunities. We're running over 2000 page loads a month, and for a small broker in a small market area, that's pretty encouraging for the future.
As usual,
thanks for visiting.