Housing Bubble A 'Crapshoot' In Sacramento

The Sacramento Bee reports on the change surrounding the housing bubble. "Until recently, home sales were on a blistering pace. But for the first time in years, a rapidly slowing market has left would-be buyers and sellers facing conflicting signals about what to do next. Buy now, or hope for a drop in prices? Try to sell now, or hope that demand bounces back in the spring?" "'What's the right answer?' asked Pam Petterle. 'It's a crapshoot out there. Nobody knows for sure.'" "Sales of new homes in Sacramento, Placer, El Dorado and Yolo counties plunged 57 percent in the last three months of 2005, compared with both the previous quarter and fourth-quarter 2004, according to the Gregory Group, a Folsom-based industry research firm. Sales of existing homes in December fell 30 percent from a year ago." "That leaves agents, mortgage brokers and others struggling to craft plans for the spring. Many agents are encouraging would-be sellers to put their homes up for sale soon, arguing they need to beat the anticipated crush of competition. Erin and Ron Steward will do just that. They tried to sell their Foothill Farms house in the fall, then took it off the market. They plan to re-list it later this month for $449,000, $40,000 less than their initial price." "'I think a lot more houses are going to come on the market in March,' Erin Steward said. Others are holding off. They want to see a rebound before they throw up a 'For Sale' sign." "Petterle doesn't think that's wise. She says new listings in the spring will compete with homes that have been for sale for up to six months, ones whose prices have been reduced multiple times. 'Sellers waiting for spring may have to start a lot lower (in price) than they thought they would have to,' she said." "Regina Luster has been trying to sell her 2,100-square-foot rental home in the Pocket since October for $559,000. She recently tried to sweeten the deal by offering to cover closing costs and lend a buyer enough to cover a 10 percent down payment. 'It's an effort to let buyers know you're flexible, that you're trying to work with them and not just trying to take advantage of a market that no longer exists,, Luster said." "A month ago Jerry Wright figured a simple newspaper ad was all it would take to sell a 1,400-square-foot rental home he owns in Roseville for $359,000. Not many homes sell for less there. But he found barely a trickle of demand. 'It's been very quiet,' Wright said. 'I've been getting very few phone calls.'" "Last week Wright, a real estate agent, decided it was time to 'stop the bleeding.' He put a renter back in the home to cover his mortgage. When the market picks up, he'll consider selling again. When will that be? That's what everyone is trying to figure out."