Has California’s housing market hit the bottom? According to an article in the Wall Street journal by Jim Carlton, “California’s inventory of unsold, previously owned homes shrank to a five-year low in December, in another sign that the state may be coming out of its worst housing slump in decades.”
The supply of unsold single-family homes dropped to 3.8 months from 5.6 months a year ago and 16.6 months in January 2008, when inventories were at a peak, according to estimates by the California Association of Realtors. The inventory levels are now at their lowest levels since 2005, resulting in frenzied
sales with multiple offers in some cities.
The current inventory rate is running well under California’s historical average since the 1980s of about an eight month supply of existing homes on the market. That’s partly because a once huge supply of foreclosures in the state has dwindled. In November, foreclosed properties accounted for 40% of all single family sales, new and used, in California, compared with 58% in January, according to the most recent estimates by Zillow.com a market tracker.
The current inventory of houses for sale in South Lake Tahoe is also down to its lowest level in January since 2007. There are currently 389 active listings on the South Lake Tahoe mls, 83 of the listings are in escrow and 306 of the listings are available. In January 2009 there were 403 active listings and only 36 were in escrow leaving 367 available homes. In January 2008 there were 399 active listings on the South Lake Tahoe mls and only 33 were in escrow leaving 366 available homes. In 2007 there were fewer active homes on the market (368), but still only 37 were in escrow making the inventory of available homes 331, more than the current inventory of 306.
Jim Carlton also points out that prices are also stabilizing. “Although most home prices remain well below their pre-bust highs of three years ago, California’s overall housing markets has shown stabilizing since early last year. The median price of an existing, single family home rose 8.4% from a year ago to $306,820, marking the second consecutive year-over-month jump, according to estimates by the state Realtors‘ association.
The median price of single family homes in South Lake Tahoe was much different than state of California’s median price. The median price of homes in South Lake Tahoe fell 22% in 2009 from 2008. The median sales price dropped from $407,000 to $318,000. This drop in the median sales price of single family homes can be interpreted in many ways. I do not think that the 22% decrease from 2008 means that property values fell 22%. There were 137 foreclosures in South Lake Tahoe that sold in 2009, almost double the amount of foreclosures that sold in 2008 (69 sold foreclosures in South Lake Tahoe were sold in 2008). Most of the foreclosures sold in South Lake Tahoe were in need of some kind of work or repairs. Although the increase in foreclosure sales did help bring down the median sales price in South Lake Tahoe, property values did also decline. The amount that property values declined is debatable.
Weather California’s housing market has hit the bottom or not, property values and interest rates are enticingly low. Adding the first time home buyer incentives and the existing home owner incentives from the government there may not be a better time to buy real estate in South Lake Tahoe!
