California Realtors please talk to me!

I wouldn't know where to begin! Depends on how you view our market place, I am in Orange County, the epicenter of Southern California. Short and simply said, over the last 6-9 years the prices and increased to much to fast. Now the market needs to correct itself. Also sales are down, because it is much more difficult to obtain a loan. Guidelines are extremely tight, as they should be.

As far as the number of agents, there are alot of people who are licensed, but not all are practicing. This is the type of market that will decrease that number in a hurry.

Mike,  Here in the AV, there are about 4000 resale homes on the market, and tons of new homes.  House prices are down.  New home prices are down 50-100k.  That all being said, people are starting to step off the curb, and start to get serious.  Things are selling slowly, and starting to pick up.  Commerical wise, things are building and growing all over.  We have seen several people step out of being Realtors, and canceling their board memeberships.  However, the ones staying around are really trying to work with and for their clients.  This downturn is actually getting rid  of the ones who were around for a quick buck, and didn't care how they did it, and showing the rest of us that we have to learn the business and work.  The time of slapping stuff on the way and having it stick is over.  However, if you are willing to work and do whatever it takes to help your customers, you will do well.  Thank you for the blog.  I hope this helps.  Earl The Pearl Sorrells

Mike, my partner and I specialize in short sales and so we have to do BPOs on a regular basis and provide the anlaysis of our area for the lender to understand our declining market. We see in Redding proper a 29% decrease market value in the year 2007. An example would be a home bought in 9/2005 at $489,000 now goes on the market for $389,000 and most like will sell for $369,000. From what I can see, we will see more decline. The short sales and REOs are going to continue to pull down our market. I can see a ripple effect out to the rest of the real estate markets nationally, however it will be in proportion to market escalation that occurred in the specific market. I do not believe that the rest of the country will see what has occurred in California to such a major extent. The above example is on a short sale home, however it also applies to the entire market. My best regards.

Hi Mike, 

To answer your question thorougly here I go.

One year ago, the top agents in the Central Valley would be lucky to sell one or two homes a month. Inexperienced agents would see 1-2 sales for the entire year, if they were lucky.

6 months ago: Prices dropped sharply.  The home that sold for $300,000 six months prior had dropped down close to $200,000 or it would not sell.

Today:  Prices have bottomed out and investors are saturating the market. They are picking up REO homes at bargain prices and causing bidding wars to happen.  I am swamped with customers and activity is really beginning to pick up. However there are an estimated 4,000 homes to be foreclosed upon in the next month in the Modesto area.

Is it as bad as CNN says? No! However, the rate of foreclosures is astronomically high with only a place in Florida being higher than the Central Valley of California. Buyers are coming out of the woodwork for bargains, so there is hope. We are probably looking close to the bottom right now, with prices stabilizing up within 10-12 months.   Sales are increasing so there is a light flickering at the end of the tunnel, and it is getting brighter every day.

Mike

In my area, Orange County CA., not only are agents dropping off by 30 to 40 %, but so are Home Inspectors, Loan people, and many who service the RE industry. In some ways we need to have a reduction of Agents, Inspectors, etc., for there is not enough business to around.

I think the consumer will benifit from this in the long run, for in theory, the good will survive. Unfortunately a few good ones will go by the wayside, but that is the price we pay to be in this business. Hopefully many will use this slow time to improve their skills, which will benifit them and the industry.

Well, I can't recall to the exact moment, per your request, what the CA market was doing. But I am fairly certain it STUNK.... like a SKUNK.

However, in Southern California, I "feel" a movement in activity happening. And I'm not the only one saying this. Other Realtors, up here in the mountain as well as down the hill in other larger cities, say that they've seen improvement the past month.  I like to believe it!!! So, I will.

Me toooooooooooooooo...it's been a long and windy road!

Hi Mike,

Thanks for your comment under my post! The Santa Clarita market--yes, it's slower than it has been. Homes are selling, though, if they're priced right (no, not the prices of two years ago). I'm seeing a lot more first time buyers and investors right now. Also seeing more REOs and short sales right now.

As for agents, it is thinning out. A lot of them are getting full-time work to pay the bills and doing real estate on the side now.

I think the news is almost always overhyping whatever's going on. I love watching "Storm Watch 2008" when it's barely sprinkling outside!

MIKE,  I havnt done much research on the cali market but this is my opinion and speculation.  I really thingk it has happened in alot of markets. 

I think prices rose to much to fast over the last many years.  Combine that with everyone who breaths that wanted a loan could get one.  That made us have record years in 06 and 07.  People got use to those record numbers. Now we are having to get use to it not being that way at the say time as balancing out the appreciations and the more strict lending guidelines. 

Hope all is well in Dyersburg, Ive been there a bunch and went to college with many folks from there.  I was at Freed Hardeman University and had a sister that lived in Troy!   

I agree with you Mike! Good to know we have some connections with college. Thanks for the invite to your class but Im pretty busy and wish it was a little closer. Good luck with it!

If you want my area of SoCal by the numbers, check out my past blogs. Our sales are off 75% and prices down by 40% in the past 18 months. 80+% of sales are REO properties and new foreclosures have outnumbered sales every month for the past several.

Having said that, it is THE BEST buyers market we've seen in a decade. Is there a light at the end of the tunnel? Read my post by the same name and find out.