Crescent City/Del Norte County Real Estate Market Report - October 2010

Crescent City/Del Norte County real estate market report for October, 2010...no surprises.

There were 13 homes sold for the month of October 2010 with a median price of $84,000. The median price for the same time period 2009 was $160,000, which means prices have declined 52% since this time last year, ouch. I doubt this comes as a surprise to anyone who has been faithfully reading my market reports and keeping up with the news.

There are 277 active residential listings, down a bit from last month. I expect the decline in listings to continue the normal seasonal descent until February. The Del Norte County real estate market has an absorption rate of approximately 21 months (the absorption rate is the rate it would take to sell all current inventory and the current rate of sales--13).

As I have been reporting each month since May or so, the upper-end market is taking a beating. Why? Upper-end homes are usually purchased by move-up buyers who generally need to sell in order to buy. You see the problem now? According to MSN money, 1 in 6 homeowners are under water (have no equity in their home). This should come as no surprise to anyone unless you live in a cave and haven't been listening to the news for the last several years.

There are roughly 7 million homes in the shadow inventory in foreclosure land and as these homes continue to be released into the housing market, prices will continue their downward spiral. There's no getting around it, when a foreclosure hits the market it is usually at below market price and it negatively effects every home in the neighborhood.

There are other considerations that hurt the upper-end market, such as how difficult it is to get a loan right now. I don't care how perfect your credit score is and how straight your row of ducks may be, the bank is going to find a reason to decline the loan somewhere in the process. Why would a bank want to loan on a home that will more than likely be "underwater" next year and might be the victim of a "strategic default"?

What is selling right now? Homes in the lower price ranges and REO's are at the top of the list. Of course there are still going to be people looking at upper-end homes, but that segment of the market is small.

If you have an upper-end home, hang in there and work with your REALTOR to make sure your home is competitively priced.

Have a wonderful month and give me a call if you would like to discuss the real estate market. It is my favorite subject.