During what's traditionally the peak time for home sales, the housing market in the Northern San Joaquin Valley continued to struggle to recover from its devastating collapse more than five years ago.
In June, Stanislaus County's median home sales price fell to $132,136, about $3,000 less than in May and $7,000 less than in the previous year, according to new figures from DataQuick.
The real estate research firm reported that home sales in Stanislaus County rose slightly last month to 749 — from 621 in May — but fell 10 percent from June 2010, when 839 homes were sold.
"We're seeing less inventory on the market," said Jeff Lundquist, manager at the Prudential California Realty office in Modesto. "There are fewer homes to be sold."
There aren't many new homes being built, he said, so existing prices should climb with fewer houses on the market.
"That seems to me like basic supply and demand," Lundquist said.
Daniel Del Real, an agent with PMZ Real Estate in Modesto, agreed fewer homes means fewer sales, but the number of homes sold might be also reflective of more educated home buyers being more selective.
"If the house doesn't fit you, don't settle for it," Del Real said. "It's a healthy thing; they're feeling more comfortable with their purchases."
He said home prices have continued to fluctuate in the past 18 months, but the price climbs and drops have not been dramatic.
"The market just sways," Del Real said. "It just keeps going back and forth."
The housing market in the Northern San Joaquin Valley was in a steep decline after the price bubble burst in late 2005, but appeared to bottom out in recent months with median prices hovering around $135,000.
But the sharp price drop over the first few years left many homeowners upside-down on their mortgages, meaning their houses were worth less than what they owed. With so many homeowners upside-down on their mortgages in recent years, foreclosures mounted, pushing housing prices down even more.
While first-time home buyers have been able to find much more affordable houses, they've had to compete with investors who in many cases make all-cash offers banks are more likely to accept.
Many valley real estate agents believe there's a hidden inventory of foreclosed properties banks are sitting on because they don't want to flood the market, and because of changes to foreclosure rules. Those homes still have to work their way back through the market, holding down prices.
The region's continuing economic slump isn't helping either, with unemployment remaining near 17 percent. But the arrival of some new retailers and other businesses in recent months, such as Dick's Sporting Goods, are bringing needed jobs to the area.
Still, government layoffs and cutbacks could blunt any recovery by the region's overall economy and its housing market.
Elsewhere in the state, the housing market showed some signs of life in June, with the Bay Area notching sales increases from May to June.
In the Bay Area, home sales rose 14.5 percent from May to June, reaching the highest level for any month since June 2010. The median price rose 1.5 percent from May to $377,750, but that was down 7.9 percent from June 2010.
Bee news services contributed to this report.
Bee staff writer Rosalio Ahumada can be reached at (209) 578-2394.
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