Home sales dropped in July in state, Northern San Joaquin Valley

Experts note job market, skittish banks as reasons

August 20, 2010 

Would-be home buyers retreated in the heat of July, which saw a sharp drop in the number of properties sold in the Northern San Joaquin Valley and statewide.

Median sale prices held steady compared with June, though they were still well down from the height of the real estate boom in 2005, according to a report Thursday from MDA DataQuick, a tracking firm based in San Diego.

Observers said the decline in sales happened in part because a federal tax credit for buyers expired. They also cited the weak economy, which has left some people without jobs and made others skittish about big purchases.

In Stanislaus County, 641 homes sold last month, down from 839 in June and 889 in July 2009.

Realtor Heidi Vento of Patterson said the reasons include the end of the tax break, the county's high jobless rate, the large inventory of foreclosed homes held back by banks and the reluctance of lenders to lend.

"It's not the easiest time to get a loan," she said. "The lenders have been as tight as they have ever been."

Stanislaus' median sale price last month was $140,000, up $500 from June and unchanged from July 2009, DataQuick reported.

The county's median peaked at $396,000 in late 2005 and has bounced around $140,000 for most of the past 20 months.

The median is the point at which half the homes sold for more, half for less.

San Joaquin County's median was $170,000 last month, unchanged from June and up $5,000 from July 2009.

Merced County had a $122,000 median last month, up from $121,000 in June and $107,500 a year before.

In Tuolumne County, where a sawmill closure compounded the recession, the median dropped to $171,000 last month, down 14 percent from a year earlier.

When economy improves ...

Statewide, the median price was $268,000 last month, down $2,000 from June but better than the $250,000 in July of last year.

California sales totaled 35,202 homes last month, compared with 43,964 in June and 45,079 a year earlier.

Stuart Gabriel, who directs the Richard S. Ziman Center for Real Estate at UCLA, said the declines are symptomatic of the weakening economic recovery.

"The housing market will improve when the job market improves and the overall economy improves," he said.

DataQuick president John Walsh pinned most of the blame on the expiration of the tax credits that had fueled sales in previous months.

"As the boost from the credits waned, low mortgage rates just weren't enough to outweigh the weak economic recovery and low consumer confidence," he said.

Further price deterioration could be coming, he said, as potential buyers wait to see whether the drop in sales translates into greater discounts.

Gabriel, however, said demand from investors and other buyers drawn to the market by low interest rates will keep prices from declining much.

Vento sees plenty of opportunity for buyers.

"Even though there's not a lot of inventory out there, it's still a good time to buy," she said. "What buyers have to remember is to be patient."

The Associated Press contributed to this report.

Bee staff writer John Holland can be reached at 578-2385 or jholland@modbee.com.

Modesto Bee is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service