The slowing market has showed us some interesting things about the cyclical world of real estate.

Different markets have faired better than others throughout the slowdown, although a major trend we have seen is that the areas that “boomed” the most during 2000-2005, are now seeing some of the worst numbers.

California, Arizona and Florida are all areas that experienced tremendous growth and price appreciation during the real estate boom, and these are all areas where we are seeing some of the biggest inventories of un-sold homes on the market.

But for California, which has been one of the hardest states hit by the stall (especially Southern California), things are actually looking a bit better.  Although with this good news also comes some bad news.

Reports recently came in showing that home prices have not declined recently, although sales have continued to slow.

A November 14, 2006 article by Annette Haddad of The Los Angeles Times, “ Southern California home prices hold as sales continue to slow,” looks at this semi-positive news that has been reported.

“Southern California home prices remained in a holding pattern last month while sales continued to decline, albeit at a slower pace, data released today showed.”

“The median price of all types of homes sold in October was $484,000, which was the same as in September, and 2.3% higher than a year ago, La Jolla-based research firm DataQuick Information Systems reported. Meanwhile, sales in the six-county region fell 22.4% to 22,117, DataQuick said. It was the worst showing for an October in a decade, but the rate of decline was the slowest since July.”

The sales pace of homes on the market and the median price of homes are two things that are directly related to one another. Buyers have been waiting on the sidelines lately, just waiting for prices to fall further.

This news shows us that sellers and buyers seem to be in a gridlock and no one is giving in. Sellers are not lowering their prices, while buyers are not going to make purchases until they see prices fall further. 

This is what has caused us to see prices hold for right now, while sales are still declining slowly.

“‘Buyers are taking their time, trying to wait out the uncertainty in a market that is rebalancing itself,’ said DataQuick President Marshall Prentice.”

Our very own San Diego has been of special concern lately because of its record appreciation and subsequent decreases.

“One region economists have been watching closely is San Diego County, where California's housing boom was launched six years ago and where it first started to fade. But in October, San Diego's home prices recovered some ground, rising nearly 2% to $485,000, compared to the month before. It was the first increase since March. Nonetheless, when compared to a year ago, the rate of appreciation in San Diego declined 5.5%, DataQuick said.”