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David Ormonde's Blog

By David Ormonde | Agent in Tracy, CA

Mixed news for the real estate market in the Tracy/Central Valley area of California

 Nationally, sales of new homes climbed 6.6% in September 2010, figures released by the federal government showed, representing the second straight month of gains, but still well below the pace when a tax credit existed. Sales of new single-family homes rose 6.6% to a seasonally adjusted annualized rate of 307,000, which is stronger than the 300,000 that economists expected in a MarketWatch-compiled poll.

A recent report showed sales of existing homes were also stronger than expected, rising 10%, and the two reports lend support to some economists who believe housing demand hit a bottom in late summer. 

It is widely felt that after dropping precipitously after the expiration of the first-time buyer tax credits, new home sales may have stabilized and we may see a gradual recovery over the coming months ahead.    

 Still, the pace of new-home sales is 21.5% below the same level of last year. The pace of new-home sales is also considerably below the 414,000 rate in April, when the market was buoyed by a tax credit that has since expired.

There’s also still plenty of supply, with the government estimating supply of eight months of unsold homes, though that’s down from 8.6 months in August. The stock of unsold houses fell 1% from August and dropped 19% from Sept. 2009.

 It does not take a genius or a crystal ball to figure out with little new construction going on in the Central Valley of California; inventories of unsold new homes at least are not a problem even with sales at a depressed level, considering the inventory is finite.  

 Nationally, the median sales price rose 1.5% from August and 3.3% from Sept. 2009 to $223,800—about 30% above the median price of an existing home.

The margin of error for new-home sales is a considerable plus or minus 16.9%. September’s housing market was only partly affected by a foreclosure moratorium of some leading lenders, which gathered pace in October.  New-home sales, by definition, wouldn’t be affected by foreclosure disputes and in fact could benefit by virtue of purchasers getting “clean” title when buying new properties.

 Here is a look at the local market for the Tracy/Central Valley area of California. 


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