By Jim Steinberg, Daily Bulletin Staff Writer
Jennie and David Garcia are testing the housing market again. This time the Yucaipa couple is asking significantly less for their five-bedroom Yucaipa home.
Their house didn't sell after a four-month effort ending in July. Maybe things will be different this time. Real estate experts were jolted by a report Tuesday that showed regional home sales slowed to the lowest level for a July since 1997.
And unlike many earlier studies where San Bernardino County seemed to be bucking the larger Southern California trend, the report showed sales were nearly as sluggish here.
The 3,216 new and existing homes sold in San Bernardino County last month were 21.3 percent fewer than the 4,084 sold 12 months earlier, according DataQuick Information Systems.
In terms of numbers, this was the poorest sales performance for a July in six years, said Andrew LePage, a DataQuick Information Systems analyst. On a percentage basis, there has not been a year over year sales decline of that magnitude since August 1992, LePage said.
Across Southern California, the number of houses sold decreased 26.9 percent.
In Los Angeles County the drop was 24.9 percent.
With a high inventory of homes for sale and declining numbers of sales, some real estate professionals and home sellers are saying San Bernardino County is now a buyer's market.
"It just switched in July. It's not a strong buyer's market. ... But it is a good time to buy a house," said Jason Bennecke, president of Highland-based Gold Key Real Estate.
Home prices are for the most part appreciating across the Southland, but at a much slower pace.
San Bernardino County registered is slowest year over year appreciation rate -- 11.4 percent -- since December 2002, as the median price climbed to $366,000, up from $328,000 in July 2005.
For the second month in a row, the San Diego County median price decreased. In July, the median declined 1.8 percent to $487,000. In June, San Diego median home prices declined 1 percent, the first time housing prices in that county turned negative in a decade.
"We are not near the bottom," said Christopher Thornberg, a senior economist at UCLA. "We are not going to have a feel on where this is going until the middle of next year," he said.
"Anybody who bought a home in the last year and was hoping for appreciation to bail them out is in for a rude awakening."
The significant factor for next year will be how the secondary effects of a housing decline rattles the larger overall economy.
For years, consumers have used rapidly increasing home values as a bank to borrow against to finance a wide range of expenditures including home improvement projects, new car purchases and vacations.
In a prepared statement, DataQuick President Marshall Prentice said, "the relatively large drop in sales last month may be nothing more than a statistical blip, but it could also be a sign of fast-petering demand for homes at today's prices.
"Our sense has been that many who bought homes in recent years purchased them sooner than they otherwise would have because of very low interest rates and a great sense of urgency, given the fear of being priced out forever or missing out on a great investment. That phenomenon helps explain why there's not more demand today. Whether July's data also signal something more ominous at work in the market -- something that would cause a severe correction in home values -- is unclear to us. We'll know a lot more in a few months," he said.
John Husing, a Redlands-based economist who studies the combined San Bernardino/Riverside county area, said he does not think the end of this housing boom cycle will be a repeat of the early 1990s.
That one was precipitated by the loss of 550,000 jobs across Southern California with the end of the Cold War.
Employment gains in Southern California have been strong for some time and in the San Bernardino/Riverside county area, the unemployment rate has never been lower in the last 42 years, Husing said.
"Normally, the real estate market stays strong when the underlying economy is strong," he said.
But the Garcias don't want to take a chance. They want to lock in some of that appreciation on their Yucaipa house in the past two years.
"We are afraid the market is going to go lower," Jennie Garcia said.
In March they listed their home with a real estate agent for $509,000.
"The first week we had four or five lookers. After that there was nothing. It was pretty bad," she said.
Last week they decided to make another stab at trying to sell the house, this time on their own.
The asking price is now $468,000. Two people showed up at an open house over the weekend.
"Better than nothing," she said.
After owning a Yucaipa rental for more than a decade, Dale and Marion Kirby decided to fix it up and sell it.
That was about three weeks ago. The initial price was $330,000.
"People liked the house. But they didn't like the price," Dale Kirby said.
Now the asking price is $298,000.
"The market is really slow," he said.
Said Bennecke: "If you want to sell your house you have to price it for what it is worth or maybe a little less, otherwise it will sit."
Bill Velto, broker for Tarbell Realty in Upland, said that countywide there's a six-month supply of houses on the market. But there are still many buyers.
People are moving into San Bernardino from Los Angeles and Orange counties. And eastern Los Angles County is seeing an influx of buyers who are cashing out of more expensive homes in the western part of the county, he said.
"Buyers have lots of choices," said Vivian Lake, an agent in Velto's office. "And they have time to look."
For Ontario resident Mynor Pinillos, now is the time to switch from being a renter to a homeowner.
"I'm seeing some nice homes. Some are overpriced. I'm not in a hurry," he said.