Tuesday, November 21, 2006

Buyers Market Strengthens on Fewer Home Sales

Buyers Market Strengthens on Fewer Home Sales
By Ines Bebea

FAIRFIELD - Dana Stever's house has been on the market for 45 days and given the 2.9 percent drop in home sales in Solano County for October, she might be in for the long haul as more sellers join the market.

According to a California October Home Sale Report released by DataQuick, 605 homes were sold in Solano County in October, down from 936 homes a year ago. That's a decrease of 35.4 percent in sales, creating great conditions for buyers.

"The way the market is right now, it's a buyer's market because there is so much competition," said Stever. "The sale of your property is going to be affected by how desperate you are to sell and your reasons for selling."

According to Stever, the last appraisal she received for her house was around $425,000 - during the height of the housing boom last year. She is selling the house for $380,000 after making upgrades of $40,000.

"Given the current state of the market, some buyers are waiting to see if the market crashes and prices plummet," said Stever. "But the Federal Reserve is not going to lower interest rates any more and this is the time to buy."

Sales of homes are declining all over California, with total sales for last month at 42,750 - a decrease of 21.7 percent from October 2005. The report also disclosed that the median price for a home last month was $467,000, up 0.2 percent from September and up 2.9 percent from a year ago.

"While the inventory is larger than we are used to, homes are selling," said Bob Dorsett, a real estate broker with Gateway Realty in Fairfield. "Those that are selling are those that are in good condition, good locations, priced right and aggressively marketed. The homes that do not have all four of these conditions working for them will likely stay in the already large inventory for a while."

Dorsett said there are 539 homes for sale in Fairfield and 216 in Suisun City.

The housing market in Solano County is also divided by sales of existing homes and newly built homes.

"In Benicia we saw a 4.6 percent increase in sales of newly built homes," said Jay Selvey, a real estate agent with Prudential California Realty in Benicia. "On the other hand, we saw a 10 to 12 percent drop in old homes. But with the market experiencing such a growth in inventory, this is a great time for first-time buyers and investors."

While real estate agents and brokers see the market has a win-win situation for buyers, others are not as optimistic.

"The market right now is actually correcting itself," said Darryl L. Carter, chief appraiser with Carter's Real Estate Appraisal, LLC in Fairfield. "The market was overpriced and overvalued."

According to Carter, the economy of the Bay Area is the last to pick up and the last to slow down, and as such he sees the real estate market going down further for another two to three years.

"I don't think we have hit bottom yet," said Carter. "In my segment of the market, I've seen a 70 percent decrease in appraisals."

But while he may be pessimistic about the market, he is confident that Fairfield will survive.

Stever is also optimistic regarding her house selling within 120 days and has no problem taking it off the market and waiting if the right buyer doesn't appear.

"I already had an offer for $320,000," she said. "But I am not in a rush to sell, given that this house is not my primary residence. Besides, if I go down on my price it brings down the asking prices for the rest of the neighborhood."

Reach Ines Bebea at 427-6934 or ibebea@dailyrepublic.net.


Change in sales and median price for homes for the third quarter of 2005 and 2006:

2005 2006 Difference

Number of sales

Fairfield 403 255 -36 percent

Suisun City 173 95 -45 percent

Median price

Fairfield $497,000 $495,000 -0.3 percent

Suisun City $435,000 $432,000 -0.5 percent

Source: Multiple List Service

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