Home Sales Cool Faster Than Expected

From KGET 17 News:

For nearly the past three years if you had a home in greater Bakersfield you could pretty much sell it within a month or so because home values had soared to record highs in 2005 and many people, especially those from outside the area, found this to be a hot market for Real Estate.
But the winds of change have blown through the area, cooling the market much sooner than most experts were anticipating.

Gary Crabtree of Affiliated Appraisers keeps track of the details of these trends each month and his latest report shows a drop in the number of homes listed in the area, down from 4-thousand-52 in August... to 39-hundred-95 in September.

But look at the numbers of actual sales: There were only 376 existing homes sold and 148 new homes sold.

The sales numbers show significant cooling from previous months.

Crabtree, compiles all the numbers each month for his newsletter, and tells me there is now about a ten-month supply of homes here, making it more and more challenging to sell a home.

He says more people now are backing away from selling and sitting on the sidelines possibly until spring.

“This is something that could be prolonged for a while. We are approaching the winter marketing season, which typically slows down. Last year in that period of time we had a 6-to-10% drop in prices. We recovered from that after the first of the year, but it would not surprise me to see another price drop during that period of 6-to-10%."

Crabtree says area builders are trying to remain responsible and not over-build the area.
Lennar remains the big builder in town with 109 building permits issued in September and 820 for the year.

But others like Pulte and D.R. Horton have backed way off from earlier building binges.
Nationally home builder sentiment improved slightly in September as interest rates remained low.

But many builders which had added employees to help with the building boom, may now be dropping those workers because of the cooling trend.

And that could have a ripple effect on the rest of the economy for several months to come.



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