Is the housing prices in california decreasing or is it just less houses that?

Question

are being sold. I know houses are staying on the market longer and less people are buying but are the prices coming down?

Answer 1

The inventory continues to build up as more people staying on the sideline to pick up a bargain later.

We were in the stage that good houses and location were being sold, so median price stayed up.

Now, we are entering the phase when all units will have to lower their price to be picked up by buyers.

-------------------
Housing market continues to slump. Now we can calculate true value of a property easily. As price decline, we don't need to guess and factor in the potential price appreciation while calculating home value. Without the guesswork, figures are more accurate.

Let's use following example:

Today, a typical 15 years old, two bedrooms condo/townhouse is priced around $500,000 and $550,000 in Sunnyvale, California. Rent for similar condo/townhouse is $2000/month.

If you are a home owner, $2,000/month in rent means $20,000 a year in profit ($24,000 per year in rent, minus $4,000 maintenance costs). A $20,000 income is equilevant of owning $400,000 bonds or CDs, because current yield of 30 Years U.S. treasuries are 5% (5% of $400,000 is $20,000). Bank CDs have similiar yields.

In our example, the two bedrooms condo/townhouse is 20% to 25% overpriced. They should be priced at $400,000.

It is interesting to note that if we redo the calculation from buyer's perspective instead of seller's perspective, the figures are even more shocking.

Mortgage payment consists of two parts: mortgage interests and mortgage principal. The interests portion is similar to rent. If you pay interest, it disappears and doesn't add equity to the property. To fully simulate characteristics of renting, we assume buyer will apply for a zero down, interest-only loan.

It turns out that rent of $2000/month is equivelant to mortgage payment of a $340,000 loan at 7.0% APR. And comparing $340,000 loan to $500,000 or $550,000 price tag, from buyer's view, the two bedrooms condo/townhouse is 30% to 35% overpriced.

Answer 2

Housing prices are "Crashing" in california, just look at the facts. Just pick up the Sunday times, in the real estate section once a month they will list the number of sales for each zip code, I looked it over last week..terrible numbers, then go to realtor.com and look at how many homes are on the market in your particular zip code..the market has already changed. You just have dreamer sellers, who think that some buyer is going to come buy.. those days are just a dream.. my advice if you have a home for sale, just price is the cheapest in your zip code , sell it today, because that will be the highest sold home when we look back in the next few years..

Answer 3

Prices are decreasing. Down about 20% in San Diego.

They might drop further, but the time to buy is now. Over thirty sellers per buyer. As soon as the prices start to turn back up, there will be a buyer frenzy like nothing you've ever seen, and the ratio of sellers to buyers will drop like a rock. Right now, if they want to sell, they have to play your game. Later on, they won't have to.

(and btw, it is a rotten time to sell!)

Answer 4

There's MORE houses on the market, and so as it becomes a buyer's market-- buyers are haggling more. So while list prices might not change as much just yet-- sell prices are. So haggle!! Eventually the sale prices will effect CMA's and appraisals, and the prices might come down.

Answer 5

Hear is a site showing how much prices are dropping in San Diego

http://sandiegomarketmonitor.blogspot.com/

http://housingpanic.blogspot.com/