Home sales decreased 36.71 percent in September in Lake County compared with the same period a year ago, and the median price of a home decreased 4.2 percent, the Lake County Multiple Listing Service (MLS) reported.

Closed escrow sales of homes in Lake County totaled 50 in September, according to information collected from the MLS, a decrease of 36.7percent from the 79 sales pace recorded in September 2006.

The median price of a home in Lake County during September 2007 was $263,500, a 4.2 percent decrease from the $275,000 median for September 2006, the MLS reported. The September 2007 median price increased 12.8 percent compared with August's $235,000 median price. 

"There is a disparity between the lower-priced or entry-level markets where prices generally are soft at best and sales have declined sharply, and some higher priced markets that continue to experience price appreciation along with somewhat smaller decreases in sales." said CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) President Colleen Badagliacco.  This may explain why in the short term median price has increased.

The third quarter 2007 median price was $260,000 a 11.6 percent decrease from the $294,000 median price reported for the same period last year.  This is the lowest prices have been since the first quarter 2005.

"While low affordability, tighter underwriting standards and expectations of lower prices continue to pose challenges for the market, the decline in sales accelerated in September as a result of the so-called credit or liquidity crunch that began in July.," said C.A.R.'s Vice President and Chief Economist Leslie Appleton-Young. "The credit crunch emerged as uncertainty about the extent of the subprime problem drove investors across the globe to turn off the tap of funds to lenders in mortgage and other credit market segments. With credit drying up, even qualified buyers were unable to receive funding for home purchases."

"We expect the impact of the credit crunch to play out over the next several months, and that it will continue to negatively impact sales," she said.

Phil Smoley, broker of CPS Country Air Properties, sees the situation as a bonanza for buyers. "With interest rates so low, sellers who are willing to negotiate way down and so much inventory to choose from, prudent buyers are snapping up deals. For those who wait until it gets better for sellers, it will be too late. This buyers' market will not last forever."

Highlights of Lake County's resale housing figures for September 2007:

• Lake County's Unsold Inventory Index for homes in September 2007 was 25.8 months, compared with 16.1 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

• Thirty-year fixed-mortgage interest rates averaged 6.42 percent during September 2007, compared with 6.52 percent in September 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.6 percent in September 2007 compared with 5.64 percent in September 2006.

• The median number of days it took to sell a single-family home was 164 days in September 2007, compared with 150 days for the same period a year ago.