Sales remain consistently slower in most parts of Contra Costa County, while prices have continued to decline, although at a somewhat slower rate. While foreclosures have dominated East County, and even parts of Concord, they remain relatively infrequent in the central areas of Walnut Creek, Lafayette, and Pleasant Hill. Overall, in Walnut Creek, sales in the second quarter of 2008 are down just slightly, although the median price has declined about 12% in Walnut Creek from the same period a year ago. Concord, on the other hand, has seen a dramatic increase in homes sales over the same period last year, mainly due to the large number of foreclosures that have been completed. Banks will typically list foreclosed properties at reduced prices to get them sold quickly, which is also reflected in the 33% decline in the median price of Concord homes from the second quarter of 2007 to the same period this year. Interest rates had been favorable, which was helping to entice buyers back into the market, but they've recently risen well above 6%. While that historically is still a very good rate, it is not as advantageous as rates were a few months ago. Credit issuers continue to heavily scrutinize borrowers in this new lending climate as well, in many cases penalizing borrowers with a credit score of under 700.
So where do we go from here? There's still an underlying lack of confidence in the housing market, but most economists are now generally agreeing that we should see a bottoming out of the massive number or foreclosures, and hopefully price declines within the next year. Whether a market rebound can occur will depend on the overall economy, interest rates, and better credit availability. It's likely however, that any future price increases will be longer term. So, is it a good time to buy or sell? If you're thinking about buying and planning on staying in the area for at least the next 3 years, it actually could be a great time to buy, especially in the Fall or over the Holidays, as there are some motivated sellers out there. Just make sure you have your loan approved ahead of time, and you do your homework on values in the neighborhood. If you're thinking about selling in this market, but are concerned about the timing, it's still more likely than not that prices could fall further before they stabilize, and it's unlikely that there will be any big rebound in home prices in the immediate future. While it may be difficult to sell at a lower price than you could have received a few years ago, that ship has sailed and is unlikely to return. All evidence now is suggesting that prices were artificially inflated from all of the bad loans being made at the time, and that prices are now coming back to where they would have been in a "normal market" for the past 5-6 years. If you have any questions, or just want to talk about the possibilities, please let me know!
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