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Written by: Lake County News Reports

Published: 18 March 2007

Created: 18 March 2007

Last Updated: 02 February 2008

LAKE COUNTY – Home sales decreased 27.7 percent in December in Lake County compared with the same period a year ago, and the median price of an existing home decreased 12.3 percent, according to information gathered from the Lake County Multiple Listing Service (MLS).

“The market continues to level out as buyers and sellers search for common ground in today’s more balanced environment,” said California Association of Realtors (CAR) President Colleen Badagliacco.

“The number of homes for sale peaked in June and July and has since edged downward,” Badagliacco said. “Although time on the market remains higher than it was a year ago, competitively priced homes continue to sell well.”

Closed escrow sales of homes in Lake County totaled 47 in January, according to the MLS. Statewide home sale activity decreased 15.3 percent for the same period.

The median price of a home in Lake County during January 2007 was $250,000, a 27.7 percent decrease from the $285,000 median for January 2006, according to the MLS. The January 2007 median price increased 13.8 percent compared with December 2006 $290,000 median price.

“Year-over-year sales declined in most regions last month, albeit at a lesser pace then what we experienced earlier this year,” said CAR Vice President and Chief Economist Leslie Appleton-Young.

“The price picture across the state continues to be mixed,” Appleton-Young explained. “Increases were strongest in urban areas that experienced relatively less new home building or strong economic growth in recent years. Prices were weakest where there has been robust home building activity or in those areas of the state that were popular with second-home buyers.”

Lake County’s unsold inventory of homes in January 2007 was 960, a 21-month supply. This figure indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

Two homes sold in the Clear Lake Riviera in January for a median price of $352,750. They were on the market for an average of 299 days. There were no other house sales in the Kelseyville area for the month.

Thirty-year fixed-mortgage interest rates were 6.14 percent during December 2006, compared with 6.27 percent in December 2005, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.45 percent in December 2006 compared with 5.17 percent in December 2005.

The median number of days it took to sell a single-family home was 183 days in January 2007, compared with 155 days for the same period a year ago.
“The ‘median’, used to measure increases in home values, is valid as long as there is no significant variation in the composition of the sample,” said Glenn Forsythe, a Lake County appraiser.

“Any significant variation can throw off the measure drastically,” Forsythe added. “This is less important in large samples such as the Bay Area. However, it can be affected largely and drastically when the sample is as small as the number of sales in Lake County. It is especially meaningless in such a small sample as we have here, especially when we consider the huge variations in types and styles of property.”  

Wikipedia defines median as “a number dividing the higher half of a sample, a population, or a probability distribution from the lower half. The median of a finite list of numbers can be found by arranging all the observations from lowest value to highest value and picking the middle one.”
 
”As such,” continued Forsythe, “tracking the ‘median’ has nothing to do with whether or not house values have increased or not. There are lots of reasons why the median will increase and values will actually decrease.

“One reason that this may occur, is simply due to the fact, that smaller houses are not selling and larger ones are. It happens when interest rates go up, a lot.  Poorer people cannot afford increases in house payments and are frozen out of the market.

“Richer people are not as affected by interest rates and are still buying. Even though the larger houses are selling at lower prices than they were previously the median can increase. The median can often increase even when prices are dropping drastically... the two are not necessarily related,” said Forsythe.

Realtor Ray Perry is a member of the CPS/Country Air Kelseyville office. Visit his Web site at www.rayperry.com for more information about local real estate.

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