Home market in doldrums

If misery loves company, area residents trying to sell a home should be feeling plenty of love.

Last month, the nation saw its biggest glut of unsold homes in 16 years, according to figures released this week by the National Association of Realtors.

The Yuba-Sutter market’s 35 percent drop in housing sales between August 2006 and August 2007 puts local homesellers in the same lousy neighborhood as nearly everyone else, according to numbers compiled by the Sutter Yuba Association of Realtors.

Last month, 105 single-family homes and condominium units were sold in Yuba-Sutter, down from 146 a year earlier.

Judy Smith of SYAR noted, however, that the high number of homes sold in August last year was an anomaly.

“We haven’t seen more than 105 homes sold in a month since,” she said.

Results released this week from another report, the S&P/ Case-Shiller Home Prices Index - considered a leading measure of single-family home prices in the U.S. - showed a decline of 3.9 percent for the 12 months that ended in July. The one-year drop was the biggest in 16 years.

Comparing August to August sales, Yuba-Sutter weighed in with a relatively steep median sale price drop of 8.1 percent - $290,000 to $260,000, according to the SYAR numbers.

Yuba City Realtor Lloyd Leighton noted that in December 2005, when the area’s house prices peaked, the median sale price was $315,000 - 17.5 percent higher than in August 2007.

“That’s been a pretty dramatic decrease over less than two years,” Leighton said.

Among the reasons for downward pressure on prices, he said, is the continuous growth of new housing developments.

Realtors’ numbers, based largely on existing home prices, are affected by the price at which new homes are being sold, he said.

“The new homes compete with all the other homes,” he said.

Lennar Corp., the largest U.S. homebuilder, for instance, has a subdivision well under way off Erle Road in Yuba County. Earlier this week, the Miami-based company, which recently laid off 35 percent of its workforce, reported the biggest quarterly loss in its 53-year history.

Companies like Lennar, which cater largely to first-home buyers, are under increasing pressure, “to sell their product, even if it means lowering price and sacrificing profit,” Leighton said.

“They’re offering huge incentives,” making things tougher for the owner of an existing home who’s trying to sell, he said.

Things are not likely to get better in the near future, said Walt Maloney of the National Association of Realtors in Washington, D.C.

Because numbers posted in any given month generally reflect negotiations that were under way during the previous two months, “September is also expected to be weak.”

In addition, he said, there’s the matter of consumer confidence.

“The psychological factors are hard to put your finger on,” he said.

Leighton’s glass-half-full message for area home sellers: The current trend is much like that of the early ’90s.

“So the good news for those who bought homes (during the latest price peak),” he said, “is that people have gone through all this before, recovered, and are now doing well.”

Realtors’ long-term predictions for the future are not so bad, he said, “but the short-term stuff looks pretty ugly.”

Appeal reporter Nancy Pasternack can be reached at 749-4712. You may e-mail her at npasternack@appeal-democrat.com