Home sales decreased 56 percent in October in Lake County compared with the same period a year ago, while the median price of an existing home fell 21.6 percent according to information gathered from the Lake County Multiple Listing Service (MLS).

"While it is typical for the median price to dip seasonally, 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 CALIFORNIA ASSOCIATION OF REALTORS® (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."

CPS Country Air Properties Broker Phil Smoley reported that many sellers are taking their properties off the market to wait things out.  "In October 2005, MLS reported over $100 million in real estate sales.  This October the number was just over $26 million," Smoley stated. "For the sellers who remain on the market, many are aggressively pricing their homes, and buyers are taking advantage of it.  This is not a good time for buyers to be sitting on the sidelines.  Reduced prices plus low interest rates make this the best time for buyer's in nearly a decade. What's bad for sellers is great for buyers."

Closed escrow sales of existing, single-family detached homes in Lake County totaled 40 in October according to the MLS. This is a decrease of 56 percent according to the MLS.  Statewide home sales decreased 38.9 percent from the 444,780 sales pace recorded in September 2006 according to C.A.R.

The median price of a home during October 2007 was $215,500, a 21.6 percent decrease over the revised $275.000 median for October 2006, the MLS reported. The October 2007 median price fell 18.2 percent compared with September's $263,500 median price.

"The impact of the credit crunch spread throughout all tiers of the market," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "While the entry-level portion of the market has been adversely affected by the subprime situation and tighter underwriting standards for much of this year, the high end of the market also saw a decline in sales, as even well-qualified buyers were affected by the lack of funds available for jumbo loans."

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

• Lake County's Unsold Inventory Index for homes in October 2007 was 29 months, compared with 13 months (revised) 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 6.38 percent during October 2007, compared with 6.40 percent in October 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.66 percent in October 2007 compared with 5.56 percent in October 2006.
• The median number of days it took to sell a single-family home was 144 days in October 2007, compared with 155 days for the same period a year ago.

Smoley thinks that unless a seller prices aggressively to sell, it is not wise to put their home on the market. "Bottom line is that for anyone who needs to sell in the next six months, they better come in about 3-5% below of what the comps show. Otherwise, they will just sit without selling, adding to the impression of a depressed market."