Thursday, January 18, 2007

Home sales plummet in Kern

From today's Bakersfield Californian :

Home sales plummet in Kern

Prices are expected to keep sliding as city 'ready for fall'

BY RYAN SCHUSTER, Californian staff writere-mail: Wednesday,

Jan 17 2007 7:10 PM
Last Updated: Wednesday, Jan 17 2007 7:13 PM

Home sales in Kern County were down 30 percent in December from the same month a year earlier, while foreclosures increased 37 percent during the same period, according to reports released Wednesday.

The numbers appear to be the latest sign of a home market downturn.

"It is a normal correction. What is abnormal about it is the size of the correction," said Steve Cochrane, the senior managing director of Moody's, who has studied the local real estate market. "It was to be expected, but the longer the boom lasted, the steeper the downside."

Moody's predicts that home prices in Bakersfield will decline 5.5 percent in 2007 and 6.6 percent in 2008. Business 2.0 magazine recently listed Bakersfield as one of 10 housing markets in the nation "ready for a fall," using some of the numbers compiled by Moody's

But local appraiser Gary Crabtree said the local market is not all that bad.

"The market is reasonably stable," Crabtree said. "Pricing is pretty stable. New construction prices are continuing to drop, but that is to be expected after home builders made so much money in the last couple years."

The median sales price for existing homes in metropolitan Bakersfield was $281,000 in December, down from $291,349 in December 2005, Crabtree said.

"That's nothing earth-shattering," said Crabtree, who said he is forecasting a 5 percent to 6 percent decline in local home values in 2007.

The number of notices of default in the Bakersfield area has increased from 33 in December 2005 to 179 in November and 243 last month, Crabtree said. He said notices of trustee sales are also up considerably.

"What we are seeing is the direct result of the creative financing that has been put in place over the last three years by lenders," Crabtree said. "If we see a big spike in foreclosures, that's going to add more supply to the market."

There were 3,181 listings on the market in Bakersfield last month, up 53 percent from December 2005, Crabtree said.

Looks like Mr. Crabtree has increased his potential loss for this year. See this post where he claimed 5% down next year.


Rob Dawg said...

"Plummet?" Rather; "Return to sustainable levels" please.

Seriously, 2004-2005 are not useful base year comparisons. They were so far off the chart that they would be discarded in any regular analysis. What we see is 2004-2005 erased and a normal cyclical decline from the 2002-2003 levels.

Bakersfield Bubble said...

Yes, but for a housing bear like me, "plummet" has such a nice ring to it...

Perfect Storm said...

"I think we haven't seen the worst of it for foreclosures," said Cochrane of Moody's

What in the hell are they talking about. Foreclosures are hitting the market like a tidal wave, this thing has a long way to go yet. More REIC spin.

Max said...

Looks like "Equibank" is down for the count:

For Immediate Release

Wachovia recently conducted an intensive strategic review of its mortgage business which has altered the company's approach to the origination of non-conforming loans. As a result, Wachovia has elected to close EquiBanc Mortgage - Wachovia's only business dedicated solely to non-conforming loans.

Perfect Storm said...

How large is Equibank. Be around since 1996.

My last blog did not make much since. I thought Moody was saying we have seen the last of the foreclosures.

Anonymous said...