Local Market Report

For the first time in over a decade, we have seen a drop in median price (current 12 months versus previous 12 months) in Bodega Bay. We'll have to see if this is a trend or one-time occurance but is was significant (-2% for Bodega Bay, -7% for Bodega Harbour) and could indicate a levelling off of home prices here on the Coast.

I'm going to keep the full summaries on my website and you can visit that webpage directly here - feel free to bookmark. Or, look for the Market Summary link at www.bodegabayproperties.com in the lefthand frame.

PENDING HOME SALES INDICATE STEADY MARKET IN COMING MONTHS

From CAR, 11/01/06:

Home sales will remain stable in the months ahead, according to NAR's most recent Pending Home Sales Index (PHSI). In September, the PHSI stood at 109.1, down 1.1 percent from the previous month and down 13.6 percent from September 2005. The index gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed. A PHSI of 100 or more generally indicates a high level of homes sales activity.

"The present level of home sales is relatively high in historic terms, and we can
expect generally minor movements around this level. We don't expect to see any changes of note until early next year when we're likely to see a modest lift to home sales," said NAR Chief Economist David Lereah. "The market currently is a little lower than expected as buyers try to time their entry. In the meantime, there's some buildup in demand that will move when consumers realize that conditions are optimal for them."

The PHSI declined across the nation in September compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 9 percent to 125. In the West, the index fell 15.2 percent to 112.5. The PHSI also declined in the Midwest and Northeast regions, falling to 96.4 and 89.9, respectively.

Clear Skies Ahead?

As with most polarized headlines and reports, one should always read with caution. However, we are seeing the media trend changing course from mostly negative real estate news to more positive news. This is one of those positive reports...

Click here for the Dow Jones MarketWatch article

Real Estate Bust or Correction?

Here's another article suggesting a correction rather than bust in the real estate market. The media at large generally takes on the extreme opinion but appears to be taking a more realistic/moderate approach these days. In summary:

"Lower asking and selling prices on houses are integral parts of the self-correction and should help shorten the whole process. Lower interest rates should make those lower prices affordable to a broader number of potential buyers. That could become an even more important factor if mortgage rates dip below 6 percent in the coming months, as some Wall Street capital market analysts expect. "

Here's the article from the San Francisco Chronicle

Home Prices Correcting, Buyers Returning to the Market

Home sales appear to be bottoming out with lower prices attracting buyers in many areas of the country, says NAR.

RISMEDIA, October 13, 2006—David Lereah, NAR’s chief economist, said the housing market is showing signs of life and that sales may be leveling out. “Many potential home buyers who have been taking a wait-and-see attitude or taking their time and being methodical in the search process are being enticed by lower home prices,” Lereah said. “Given a positive economic backdrop of lower interest rates and job creation, we expect sales activity to pick up early next year.”

Read the complete article here

U.S. Economy Will Grow Slowly and Not Sink into Recession, Conference Board Reports

Reported downturn is modest, but economic cycle is mature, says chief economist

Click here for the article

PENDING HOME SALES INDICATE STEADY MARKET IN COMING MONTHS

The housing market will continue to stabilize in the months ahead, according to NAR's most recent Pending Homes Sales Index (PHSI). In August, the PHSI stood at 110.1, up 4.3 percent from the previous month and down 14.1 percent from August 2005. The index gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed. A PHSI of 100 or more generally indicates a high level of homes sales activity.

"Our sense is that home sales may have reached a low in August -- the Pending Home Sales Index shows home sales should be fairly stable over the next two months, although a minor decline is possible," said NAR Chief Economist David Lereah. "With fewer new listings coming on the market, we should be able to draw down the inventory supply early next year to the point where home prices will rise, but at a slower pace than historic norms."

The PHSI declined across the nation in August compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 9.4 percent to 126.8. In the West, the index fell 16.9 percent to 112.7. The PHSI also declined in the Northeast and Midwest regions, falling to 95.4 and 93.8, respectively.