Mother Lode home sales, prices in flux

By Union Democrat staff September 29, 2011 02:03 pm

    The number of homes sold in Mother Lode has fluctuated over the past several months and prices have fallen compared to last year.
    There were 54 homes sold in Tuolumne County in July and 77 sold in August, according to Ann Ritchie, executive officer with the Tuolumne County Association of Realtors. The median home price fell from $173,500 in July to $159,900 in August.
         Home prices are down compared to a year ago, but higher than they were in January when the median home price was $150,000, Ritchie said.
    She said part of the problem is that the housing market in the foothills is continuing to be dragged down by stagnant home sales in the Central Valley. Ritchie said the many distressed homes that remain on the market will have to be cleared out before real growth will occur.
    “A lot of times I thought we were near the bottom, but it keeps creeping down,” Ritchie said. “It’s hard to tell where the bottom is.”
    Calaveras County, meanwhile, experienced a bump in home sales and prices in the past two months. There were 92 homes sold in July and 106 sold in August, according to Kim Pugh with the Calaveras County Association of Realtors. The median sell price also rose from $142,700 in July to $165,750 in August, she said.
    Though the sale figures represent a rise for the year, they still remain well below sale prices from last year, she said.
    Normally private sale homes sell for higher average prices than foreclosures and short sales, but while the percentage of distressed home sales was down from July to August, the median price also fell, Ritchie said. She said the market is still in flux and that some of the data that has been recorded over the past several months can be counterintuitive.
    Of the 77 homes sold in Tuolumne County in August, 43 were private sales, 29 were foreclosures and five were short sales.
    Ritchie said the peak buying season is generally from June to October, and the best months for home sales this year have been March, May, June and August.
    Home prices rose for a fourth straight month in most major U.S. cities in July, buoyed by the peak buying season. But the housing market remains depressed, and prices are expected to decline in the coming months.
    The Standard & Poor’s/Case-Shiller index released Tuesday showed home prices increased in July from June in 17 of the 20 cities tracked.
    Prices rose sharply in Minneapolis and Chicago. Prices in two cities hit hardest by the housing crisis — Las Vegas and Phoenix — declined.
    The index, which covers half of all U.S. homes, measures prices compared with those in January 2000 and creates a three-month moving average. The July data are the latest available.
    Analysts cautioned that the price increases are temporary, and not evidence of a housing recovery. Home sales have declined in each of the months in which prices rose.
    Prices are expected to drop again this fall and winter, based on the poor sales and expectations that banks will resume processing a raft of foreclosures that have been in limbo.
    “This is still a seasonal period of stronger demand for houses, so monthly price increases are expected,” said David M. Blitzer, chairman of Standard & Poor’s index committee. “While we have now seen four consecutive months of generally increasing prices, we do know that we are still far from a sustained recovery.”
    Over the past 12 months, prices have fallen in all but two cities: Detroit and Washington.
    In Detroit, prices have risen 1.2 percent during that stretch. Still, the city has been among the nation’s worst housing markets over the past decade. In July, homes prices there were equal to 1995 levels.
    “In some cities, prices are so undervalued they are not likely to fall further,” said Patrick Newport, U.S. economist at IHS Global Insight. “Detroit, which largely avoided a run-up in prices but still saw prices collapse, may be a case in point.”
    Washington, conversely, has had the nation’s best housing market. Home prices in the nation’s capital have increased 0.3 percent in those 12 months, and were equal to 2004 levels in July.
    Housing is a key reason the economy has struggled more than two years after the recession officially ended.
    High unemployment, larger required down payments and tighter credit are preventing many buyers from entering the market. Many who could afford to buy are waiting because they are worried the U.S. could fall back into another recession and prices could fall further.
    Sales of previously occupied homes are only slightly ahead of last year, which was the weakest since 1997.
    New-home sales dropped in August for a fourth straight month. This year is shaping up to be the worst for sales of new homes on records dating back to 1963.
    And home prices are certain to fall further once banks resume millions of foreclosures, which have been delayed because of a 10-month government investigation into mortgage lending practices.
    “This effect (of spring buying) will fade soon because sales have dropped back in recent months,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics. “We expect to see price declines again by the autumn, but we do not anticipate a renewed collapse” in the housing market.

    Contact Ryan Campbell at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or 588-4526.

    The Associated Press contributed to this report.