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Why the sudden slow down in home sales?

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POSTED November 1, 2013 10:08 p.m.

Hey Real Estate Boys; This should be a quick and easy question for you boys.   Sometime in April or March the market picked up, as you both reported, and we seemed to have a resurgent market all of a sudden.  Well, the end of the summer, say July, I saw signs sitting a lot longer in front yards.  Then looking at the closed sales in another newspaper, the sales seemed to have dropped or stopped again.  So, here’s my question for you: First, have you noticed, or will you admit to a slow down, and if so, why do you think things have slowed? 

— Karnak

Well, Karnak, it is truly a pleasure hearing from you although you probably knew this before we did.  You have been gone from us for so long the boys thought you weren’t with us any longer.  Nonetheless, thank you for your timely question, but again you knew that as well.  OK, your question is a very valid one for this time of the year.  Here we go with an answer. 

The way Karnak wrote the question is exactly right on target.  The market began to rebound early in 2013. If you recall from our articles, the prices of homes seemed stuck in the Christmas muck late last year. Then, all of a sudden, when spring arrived buyers seemed to awaken just like the flowers and trees. The market and Realtors were caught totally off guard when the buying trend hit. Like 2012, there was very little inventory and that was still true in October of 2013. As of Oct. 23, we have 118 active listings.  We’ve closed 562 homes since Jan. 1, 2013.  An interesting fact I just learned folks: Of the 562 sales, 75 percent of them sold in 30 days or less.  That equates to about two months of active inventory.   Karnak probably already knew all these numbers, but our Journal readers may not.  Anyway, we’ll get back to the subject now.  When the buying frenzy began we had very little inventory and all of a sudden a lot of buyers.  The old economic saying came to be true.  The lack of inventory caused the prices to rise.  And rise they did — and fast.  By the beginning of the summer prices had gone up as high as $160 per square foot — some higher, and many lower per square foot.  

The next card please, says Karnak.   With the envelope to his forehead he says “THE GOVERNMENT.”  That’s what happened next.   The Feds spoke in July and said they were thinking of not buying the $85 billion a month from the bond market, which helped a mild panic and the interest rates rose a bit to 4.50 percent.  Finally, we’re in October and when the little boys we have in Washington, D.C. couldn’t get along in the sandbox the housing market had had enough.  All through the summer the market seemed to slow down a little weekly.  Well, the Feds are still buying bonds and the interest rates have adjusted down again to 3.99 percent.  The jobs report for September was positive, but October will be down due to the Fed closures.  Gas prices seem to be going down again, but not fast enough for me.  I even read this morning that the Christmas buying is expected to be 10 percent over the last few years.  So the economics seem to be positive for the housing market to rebound again.  The next card please for the great and magnificent Karnak...  

With the card held flat to his forehead, Karnak says proceed with caution.  While the market has slowed, there is still a very healthy market just not at the prices you might expect.   In the 95382, the market price was about $150 a sq. ft. on Oct. 23. As always, there will be much higher prices per square foot and some much lower but the $150 is just right.  So, if you want to sell and sell fast, take the above information to heart and go forward with a cautious eye.  The market went up so fast I think we’re in a period of adjustment and, as always, the final sale always seems to come down to price. 

Only the great and magnificent Karnak knows what the market will do in the future.  Maybe you, the great Karnak will share with us your wisdom?  Thanks Karnak for writing.  You are no Johnny come lately.

Now for a public service announcement from every Realtor,  title companies and lenders in Turlock.  On Dec. 4, the Turlock Council of Realtors will holding the 30th annual CanTree breakfast and auction.  This breakfast will start at 7:30 a.m.,  and the auction will follow.  The function will be held at the Turlock War Memorial at Canal and Palm.  The breakfast costs $5, and if interested call your favorite local  Realtor for tickets.  In past years the Realtors, Turlock Together and the Salvation Army have provided about 2,000 food baskets and toys for over the elderly and needy families in Turlock, Keyes, Denair, Delhi and Hilmar.  Over the years, the Turlock Realtors have collected and donated well over $500,000 to help the needy in our community.  Without the support of local businesses and people of Turlock, this huge effort would not be possible. 

— A little about us, Lloyd is a retired farmer of 27 years and a realtor for about 10 years.  Lloyd is an active member of the Central Valley Association of Realtors and sits on the CVAR Board of Directors.  Lloyd is a long time member of CVAR’s Master Club for his sales production.   

Larry has been involved in Turlock real estate for 30 years and has been a broker for almost 27 years.  He is also active in CVAR activities and is a past president of CVAR.  If you have questions please call Lloyd at 531-4853 or Larry at 484-4216.  E-mail questions for future columns to: lrblackman@earthlink.net or lndrumbeck@aol.com

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