C.A.R. REPORTS SALES DECREASE 38.9 PERCENT, MEDIAN HOME PRICE FALLS 4.7 PERCENT

Home sales decreased 38.9 percent in September in California compared with the same period a year ago, while the median price of an existing home fell 4.7 percent, C.A.R. reported today.

"While it is typical for the median price to dip seasonally as we move from August to September, this decline -- which was both the largest month-to-month percentage decline on record and the first year-to-year decline in more than 10 years -- was mainly the result of the credit or liquidity crunch, which also drove sales below the 300,000 mark," said C.A.R. President Colleen Badagliacco.

"California's sales fell more steeply than those of the U.S. as a whole because of its heavy reliance on jumbo loans -- those above the conforming loan limit of $417,000," she said. "This speaks to the need to raise the conforming loan limit in higher-cost states like California to more accurately reflect the cost of housing."

C.A.R.'S 2008 CALIFORNIA HOUSING MARKET FORECAST

Home prices throughout most of California will post modest declines next year while sales of existing homes will stabilize from the precipitous decrease experienced in 2007, according to C.A.R.'s "2008 California Housing Market Forecast" released today.

The median home price in California will decline 4 percent to $553,000 in 2008 compared with a projected median of $576,000 this year, while sales for 2008 are projected to decrease 9 percent to 334,500 units, compared with 367,500 units (projected) in 2007.

"Tighter credit standards, affordability concerns, and a continued standoff between buyers and sellers will contribute to continued weakness in the market going into next year," said C.A.R. President Colleen Badagliacco. "Now is not the time for homeowners to test the waters, only serious sellers should put their homes on the market in what will continue to be a challenging sales environment."

Fast Facts

Calif. median home price - August 07: $588.970(Source: C.A.R.)

Calif. highest median home price by C.A.R. region August 07: Santa Barbara So. Coast $1,262,500(Source: C.A.R.)

Calif. lowest median home price by C.A.R. region August 07: High Desert $287.39(Source: C.A.R.)

Calif. First-time Buyer Affordability Index - Second Quarter 07: 24 percent (Source: C.A.R.)

Mortgage rates - week ending 10/04: 30-yr. fixed: 6.37%; Fees/points: 0.5% 15-yr. fixed: 6.03%; Fees/points: 0.5% 1-yr. adjustable: 5.58%; Fees/points: 0.7% (Source: Freddie Mac)

Bodega Bay Sales Price Drops Average 9%

The average price of a home in Bodega Bay as of August 2007 was down to $906,000 from $998,000 in 2006. This represents a 9% decline. The median price dropped even more significantly during this period - from $980,000 in 2006 to $815,000 in 2007 or nearly 17% down. This drop is probably what has contributed to recently growing buyer interest levels as the lender business stabilizes.

The discrepancy in average versus median prices indicates that lower priced homes are dominating the market right now, although there have been a few sales in the high end lately (over $1.5M).

Fed cuts rates by a half point

The Federal Reserve lowers the target on a key short-term interest rate for the first time in four years from 5.25% to 4.75%

September 18 2007: 2:18 PM EDT

NEW YORK (CNNMoney.com) -- The Federal Reserve cut the target on a key short-term interest rate by a half of a percentage point Tuesday to 4.75%, further acknowledgment from the central bank that the mortgage meltdown plaguing Wall Street and Main Street could have a negative impact on the economy.

The cut to the federal funds rate, the first since June 2003, was widely anticipated by investors and followed a surprise cut to the Fed's discount rate on August 17. The only question was whether the Fed would lower the federal funds rate by 25 basis points or 50 basis points. (There are 100 basis points in a full percentage point.)

The federal funds rate, an overnight lending rate that banks charge each other, is important since it influences the amount of interest consumers must pay for various types of debt, such as credit cards, home equity lines of credit and auto loans. The rate cut should help some beleaguered home borrowers who are set to see monthly payments on adjustable rate mortgages rise later this year.

Bodega Bay Bicycle & Pedestrian Trail

ATTEND THE MEETING IN SEBASTOPOL ON SEPTEMBER 27 TO ADVOCATE FOR FUNDS IN BODEGA BAY. Meeting at Sebastopol Veterans Hall (282 High Street) from 6:30 to 8:30.


The Coastal Conservancy will be meeting on September 20 to consider authorizing a grant to Sonoma County Regional Parks to its review of the potential trail through Bodega Bay.

The purpose of this project is to develop a safe alternative to the automobile for bicyclists and pedestrians throughout the community of Bodega Bay.

There is a lengthy but informative conceptual improvement plan by LandPeople on the Sonoma County website - click here for further updated information and the project report.

Financial projections run from $6M-10M for the trail that would run from Salmon Creek to Doran Park with a wooden boardwalk over the harbor from Porto Bodega to Lucas Wharf.

NAR Predicts Improved Home Sales

Even with wacky and unpredictable factors influencing the real estate market these days, NAR has confidence that many important factors are aligned to indicate good potential for a much-improved 4th quarter and beyond...

Click here for the article.