"The Bell Has Tolled"
More Sacramento R.E. Softness
excerpts (c) Sacramento Bee
Region's home sales signal softer market
'For Sale' signs mushroom, stay up longer
By Andrew LePage -- Bee Staff Writer
Published 2:15 am PDT Friday, August 19, 2005
It's a sign of the times: Jim Eggleston, owner of Sacramento's biggest residential "For Sale" sign installer, predicts this will be his busiest week in 21 years in business. He's had to hire an extra worker and buy a new delivery truck since his crew planted a one-day record of 225 signs on Monday.
"There are whole lot of houses going up for sale," says Eggleston, who promises next-day installation when a real estate broker orders a new sign. "The number of 'For Sale' signs we're removing keeps going down relative to the number we're putting up."
His experience is just one more signal that the Sacramento region's housing market continues to cool off, as inventories rise, price reductions become rampant and homes stay on the market longer, particularly those in the $400,000-and-up price range.
In July, the monthly inventory of resale homes for sale in Sacramento, Placer, El Dorado and Yolo counties combined shot up to 7,263 - the highest for any month since September 1998. As of Thursday morning, the inventory had risen another 26 percent to 9,141 homes, reports TrendGraphix, a local data firm affiliated with Lyon Real Estate of Sacramento.
"The inventory is ramping up and we're now seeing a changing market - the bell has tolled," said Michael Lyon, head of TrendGraphix and Lyon Real Estate.
Eggleston, owner of The Sign Post, says his installation crew sees the signs of this investor exodus daily.
"You can tell when you go up to a house and the lawn isn't mowed and the tenants ask you what you're doing there," Eggleston said.
Reductions in asking prices are now rampant: In May there were 2,318 price reductions in the four-county region; in July there were 4,100 and this month is on pace to see about 4,500, TrendGraphix reports.
Among other signs of a downshifting market:
In recent weeks, some luxury homebuilders have begun offering pricey incentives, such as Centex Homes offering a $40,000 swimming pool for certain homes priced over $800,000 in Lincoln.
The local Building Industry Association reports that in July the number of people shopping in new home subdivisions in the capital region fell to 32,679 - down 25 percent from a year ago and the lowest for July since 1999. Some in the industry have argued that shoppers of both new and resale homes were scarce last month because of the extreme heat.
Another big change is that builders are, for the first time in years, seeking the help of real estate agents in drumming up business.
"We're starting to get a slew of invitations from builders ... where they're holding their models open to brokers before they're open to the public," said agent Britt Wiseman of Coldwell Banker's Sierra Oaks office. "That's a dramatic change."
