Home Buying in 93401>Question Details

Carolyn Mitc…, Home Buyer in Arroyo Grande, CA

are prices going down?

Asked by Carolyn Mitchell, Arroyo Grande, CA Thu Feb 16, 2012

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To update my previous answer, most everyone agrees that all markets are local and we can all say with certainty what has happened to prices but not what will happen in the future. By way of example, the residential market in our community, Arroyo Grande, showed a continuing decline during the past two years. Median sold price in April, 2010 was $477,500. In April, 2012 it was $328,755, a decline of 31%.

Is this indicative of what the future holds in store? Possible not. During the same two-year period the supply of homes for sale was reduced 45% yet the demand for those home was down just 4%. As you may know from Economics 101, when supply can't keep up with demand, prices begin to rise.

All of that said, it is still true that nobody can predict the future. All we can do is look at the indicators and make informed guesses.
0 votes Thank Flag Link Wed May 9, 2012
Every market is different. Prices are going up here in Tucson, AZ & our existing homes inventory is back to 2005 levels.

Spirit
0 votes Thank Flag Link Wed May 9, 2012
Trulia has added a new feature that tracks prices. Read about it here:
http://info.trulia.com/trulia-price-and-rent-monitor
0 votes Thank Flag Link Wed May 9, 2012
To adequately track home prices on the Central Coast you may use the http://WWW.HouseFinity.Com Web Portal. It is the Hot Sheet tracker with up to the minute information. The Market is a breathing instrument that is guaranteed to change due to Foreign Affairs, external factors that homeowners have no control over, as well as internal and Domestic factors such as an economic shift.

Common sense is usually your best indicator coupled with hard statistics and data. If there are fewer jobs, and more college graduates out of work, added with their student loan debt, then one might gather that prices are going down.

If demand increases and supply remains unchanged, then it leads to higher equilibrium price and higher quantity.

If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and lower quantity.

If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity.

If supply decreases and demand remains unchanged, then it leads to higher equilibrium price and lower quantity.

We certainly are not short of Supply or inventory. However, keep in mind that Sales are up, not necessarily Prices. Investors are buying up inventory competing with the First Time Homeowner. The competition will not go away as far as Who has the buying power. The key is to Buy what you can see yourself living in, what your debt to income ratio will allow you to commit to for a mortgage, and then invest in your home or rental.

Do not wait for the Sky to Fall. It already fell. Everyone is climbing their way back up.

Best Wishes, Holly Campuzano e-PRO, AHWD
Director of HouseFinity.Com
0 votes Thank Flag Link Tue May 8, 2012
Going down in the future? You would need a crystal ball to answer that question. I can tell you that I have submitted offers for 4 homes this year and all had 4 other offers at the same time. The inventory of homes on the coast has been reduced significantly compared to recent years, but that will probably change soon.

For over 20 years I have been working in the Real Estate industry. I try to think I have a keen insight in what is happening, going to happen and hope will happen. I use statistics to show what the current trends are.


Total 2011 Sales in Arroyo Grande, Pismo Beach, and San Luis Obispo County compared to Sales in 2008, 2009 and 2010.

Arroyo Grande Single Family Homes Sold
YEAR HOMES SOLD AVERAGE PRICE FORCLOSURES
2011 336 $523,000 115
2010 285 $571,000 81
2009 218 $552,000 71
2008 244 $648,000 58



Pismo Beach Single Family Homes Sold
YEAR HOMES SOLD AVERAGE PRICE FORCLOSURES
2011 136 $630,000 38
2010 79 $614,000 20
2009 70 $792,000 18
2008 82 $895,000 5



SLO County Single Family Homes Sold
YEAR HOMES SOLD AVERAGE PRICE FORCLOSURES
2011 3,078 $433,000 1,256
2010 2,223 $460,000 1,701
2009 2,220 $479,000 2,040
2008 2,057 $550,000 1,799

Please feel free to check out my Blog at http://dnorwood.com as this is my main topic of discussion. You can also call me at 805-471-0828 for more information about the market.
Web Reference: http://dnorwood.com
0 votes Thank Flag Link Thu Feb 16, 2012
Hello Carolyn,
That has been the question for the past four years.

Anymore, I think buyers and sellers have to ask themselves how the market fits with your long-range plans. There are some additional factors that favor California markets, reporters and analysts say. California, for instance, will receive $18 billion in help from the foreclosure settlement announced in recent weeks. (California will be getting most of the money. Yeah, it is an election year.) There are other factors that may come into play that are unusual, too. There is a government program under consideration to sell off large property portfolios at steep discount under agreement to rent those properties easing the burden of all that inventory for Uncle Sam. There are even instances where wild optimism has replaced gloom. Some in the San Francisco Bay Area are wondering how the Facebook IPO will affect real estate prices. (My personal opinion is the bottom pushes at the top - not vice versa. The IPO effect will be minimal if it is even measurable. But, it's nice to have a few more millionaires.)

The economy is improving, albeit slowly.

Remember that a home is long-term purchase. Your concern should be what is the market going to do over the long run.

Important to that analysis is to recall that people generally want to be homeowners. People are not responding to surveys saying they're giving up on the dream. Their ability to buy the dream hit a big speed bump in 2007. We can count on one thing not changing: An overwhelming majority of American voters support the homeowner tax deduction. The National Association of Home Builders sponsored the survey. See the link below. In survey after survey, American adults say they want to own as opposed to renting. Sure, the economy has to get better for those dreams to come true. Looking around, there is a tendency to be optimistic. There are even a handful of people who think housing is seriously unprepared for a correction that could see home prices rise dramatically.

You need to ask:
What is a realistic plan for you?
How is your business doing?
Is your company still laying off?

We all would like to consult the crystal ball. We can only point to the analysis that is largely based on the past. Where there seems to be an agreement is that the markets around the nation have been putting in a floor on prices in recent months. Prices may still slip some. No one is say the economy is healthy - yet. This is why many of us are suggesting homeowners take the long view. Are we closer to a recovery or in recovery? That seems to be the question these days.

http://www.nahb.com/news_details.aspx?newsID=14563
http://www.themreport.com/articles/ninety-eight-housing-mark…

Best,
SuZ
PML of Longmont, CO
0 votes Thank Flag Link Thu Feb 16, 2012
I would say real estate prices are pretty near the bottom for our area. On several of the last properties we have sold we have consistantly received offers over asking price. There could be several factors that contribute to this, lack of inventory, elections near, economy improving. Prices are not dropping like they were in years past...now is a great time to buy! The prices now are very similar to prices before the real estate boom in the early 2000's...I don't see them dropping as we head into spring and summer, which is always a busier time in general.
0 votes Thank Flag Link Thu Feb 16, 2012
Yes Carolyn, Keith and Eric- are correct when they state that Real Estate markets are very local specific. That being said, I like to look at the big picture. The economy is improving, which is typical of an election year. Mortgage rates are at an all time low and real estate inventory in some areas of San Luis County is definately down. I am working with an increasing number of out of area buyers who are looking at all real estate types (residential, commercial, multifamily..) and are somewhat frustrated with the lack of inventory.

Market drives our economy still and unless we get more inventory in these areas as we progress into the traditional selling seasons of Spring and Summer we will see homes selling in days and prices going up. We are already seeing this in parts of North County with many homes selling for more than list price...

In answer to your question Carolyn-"it depends on where you are looking in SLO County and when you will be buying." Now is a very good time to get out in front of the Summer buyers and stake your claim before prices finally do go up.

If you are looking for personalized service-I would be glad to help.
0 votes Thank Flag Link Thu Feb 16, 2012
Eric is correct. Real estate markets, like politics, are all local. Certainly any good REALTOR can provide you with market reports customized to your area and property of interest. Alternatively, if you're more the do-it-yourself type at this point, our free Research Center will provide you with access to much of the same data utilized by agents so you can create reports based upon your own criteria - neighborhood, price range, timeframe, property type, etc. The link to that free site is attached.
0 votes Thank Flag Link Thu Feb 16, 2012
The prices in San Luis Obispo County overall have still shown a slight decline. It does depend on the price point and specific area you are talking about. While prices are generally stable presently, activity is increasing and there is a lack of housing inventory on the market. Hopefully that helps answer your question.
0 votes Thank Flag Link Thu Feb 16, 2012
In this market you will have to be more specific. I live in an area where some neighborhoods are increasing a bit while other are flat or still declining some. Get together with a realtor and discuss areas and price ranges that interest you. They will be able to give you detailed information regarding pricing.

Best Regards,

Eric Soderlund
0 votes Thank Flag Link Thu Feb 16, 2012
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