Whoa, doggies. In September of this year, real estate sales were
down from September the year before by a whopping 31.7 percent
according to the California Association of Realtors (CAR), who make
it their business to track factoids like this. However, you have to
remember that September of 2005 was pretty much the high point of
the bull market, to borrow a metaphor.
Whoa, doggies. In September of this year, real estate sales were down from September the year before by a whopping 31.7 percent according to the California Association of Realtors (CAR), who make it their business to track factoids like this. However, you have to remember that September of 2005 was pretty much the high point of the bull market, to borrow a metaphor.
So are prices plummeting? Not exactly. In fact, the median price is up 1.8 percent from then. The rate of home price appreciation will post a modest decline next year following several years of steep increases, while the sales pace will decrease as the market stabilizes throughout 2007, according to the California Association of Realtors’ “2007 California Housing Market Forecast” released last week. Chief Economist Leslie Appleton-Young presented the forecast at the California REALTOR EXPO 2006 on October 18 at the Long Beach Convention Center in Long Beach.
The median home price in California is expected to decline 2 percent to $550,000 in 2007 compared with a projected median of $561,000 this year, while sales for 2007 are projected to decrease 7 percent to 447,500 units, compared with the 481,200 units projected for this year.
The frantic sales pace and price increases of the past four years could not continue indefinitely. The housing market was not great in 2006. The anticipated slowdown that began in October 2005 was fueled by hurricanes in the Gulf Coast, a significant drop in consumer confidence, rising energy and raw materials costs, and a series of Federal Reserve interest rate hikes that began in June 2004.
Fixed-rate mortgages also hit and passed the psychological threshold of 6 percent, while adjustable rate mortgages passed 5 percent, ultimately causing a decline in affordability. Affordability concerns also will limit purchases for many people in California during 2007, especially for first-time home buyers. However, it is important to look at these rates through the glasses of time. These are historically still very good rates. Many lenders are looking at ways to make housing more affordable, including longer terms (50 years versus 15 or 30).
“Looking to 2007, we expect that some regions of the state, including the Central Valley, San Diego and Riverside/San Bernardino region, will experience sales declines greater than the state as a whole,” Appleton-Young said. “That also holds true for several second-home markets, including the desert areas of Southern California and the Wine Country.”
Over 13,000 Realtors attended the CAR event, seeking new information about real estate technologies, finding new ways to increase business, and gleaning expert opinion on where the real estate market is going in 2007. EXPO provided more than 45 educational seminars and special events presented by some of the industry’s leading experts, including certified real estate coach Bernice Ross and DRE Commissioner Jeff Davi who hails from Monterey. In the Exhibit Hall over 400 vendors and service providers were on-site to present the latest real estate products and services. Hey, Great! New ways for Realtors to spend money!
This region was well-represented by the members of local Boards of Realtors, who give generously of their time to attend this event and share the information with the rest of us at Realtor Marketing Meetings. Before I became a Realtor, well-meaning friends tried to steer me away from the industry, claiming it was filled with back-stabbing sharks and bottom-feeders. This has, happily, not been my experience. My fellow Realtors are, on the whole, intelligent and caring individuals with a generous spirit. It’s as Anais Nin said it: “We don’t see things as they are, we see them as we are.”
Certainly at the brokerage where I work (I can’t speak for others) there is a feeling of cooperation and consideration. We have an excellent new agent training system. There is a mentor program whereby a new agent is teamed with an experienced agent to provide excellent skill and service for every client. There is no back-biting, let alone back-stabbing. Any agent not conducting his or her self with the highest of ethical standards is shown the door. There is a healthy competition, but no one need fear their clients will be lured away by another agent. I don’t know where this idea comes from that agents are only out for a buck and that buck is only for themselves. Almost without exception the agents with whom I work and with whom I have done transactions over the past years have been great human beings.
Oh, yes. There is a little mystery about this year’s convention. Several of the attendees remarked that they weren’t going to discuss anything about salsa dancing. Now that seemed rather random to most of us. I mean, we didn’t expect anything about salsa dancing at a real estate convention. Just like we didn’t expect them to discuss anything about, say, whale watching or snow boarding or white-river rafting. I believe there’s a smoking gun here. If you run across any Realtors who attended the conference, see if you can find out about salsa dancing. Enquiring minds want to know!
And be kind to your Realtor.
