Tuesday, July 05, 2005

Vallejo Home sales tapering off

By RACHEL RASKIN-ZRIHEN, Times-Herald staff writer

A 'SALE PENDING' SIGN stands outside an El Camino Real home in Vallejo, where real estate professionals report a softening in the market for high- and low-end listings, but an increase in the number of houses for sale. Photo: Mike Jory/Times-Herald

Local real estate professionals say there are signs the Vallejo area's hot housing market may be cooling.

"It's taking longer to sell homes," said Mark Rogers of Realty World Silverado. "The shift in cycle may finally be occurring. There is at least the perception of change."

Rogers said real estate cycles traditionally last about a decade, and that the state is in the 10th or 11th year of a seller's market.

In Vallejo, however, the seller's market was interrupted by the 1996 closure of the Mare Island Naval Shipyard, he added.

"In Vallejo, it's a little different than the rest of the state," Rogers said. "The rising market started in 1999 here because of the recession caused by the base closure, which depressed the market in Vallejo for a couple more years."

Realtor Beth Brittenbach of Century 21 Schutjer Realty said that while it's too early to predict whether or how much the market will change, a shift does seem to be in the air.

"It seems that we are seeing some softening of prices at the higher end of the scale in our area, and, interestingly, also at the lower end," Brittenbach said. "Part of the reason is, we have the highest inventory we've had in about three to five years at the moment. It's like everybody decided to put their home on the market in May."

Brittenbach said that homes in the $400,000 to $450,000 range are getting some slight price reductions and are staying on the market longer.

The number of properties listed with Realtors in Vallejo this June was 26 percent higher than last year at this time - 248, up from 197. That's "a pretty big jump," Rogers said.

Rogers said this could be a function of older, original homeowners wanting to take their profits and retire elsewhere.

"A lot of Vallejo was built in the '50s and '60s, and a lot of the homes still belong to the original owners," he said. "They've lived here all their lives, and they're clearing out. Or maybe sellers are anticipating an end to the sellers' market, and are concerned that if they don't sell now, they could lose out."

Preliminary figures show the number of houses sold last June seems to be about the same as the number sold this year, Rogers said. The prices of homes sold in the Vallejo area in June also seemed to be equal to the list price, which is unusual, since the list price is usually higher, he added.

"Taken together, this could indicate some of the prices-are-continuing-to-rise psychology is dissipating. Maybe sellers are getting a little worried," Rogers said.

But whether or not the current local real estate situation indicates a shift in the market or a temporary blip, it will be a while before buyers or sellers can expect any major price changes. Any recent local price fluctuations are more like adjustments, Rogers said.

"The price of homes in Vallejo in June were 26 percent higher than they were last year, and they were 24 percent higher in Benicia," Rogers said.

He added that the numbers don't indicate a major shift in the local real estate market. At least not yet.

"Sellers are now realizing they have to lower the price to sell, but they're only lowering them to the market price, which is still ascending. I don't see the market dropping, but it may be slowing or leveling off," Rogers said.

Brittenbach agrees that any change that may be occurring will happen slowly. "The market remains good, and none of the experts expects a huge downturn," she said.

- E-mail Rachel Raskin-Zrihen at RachelZ@thnewsnet.com or call 553-6824.

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