Home Market Puzzle Gives Buyers Pause

The condition of California's current residential housing market puzzles and gives pause to some prospective home buyers.

How can prices be rising while sales continue to fall off record highs?

Why are some parts of the nation struggling with a glut of new and resale homes while others regions seem relatively unphased by the sales slowdown?

Why is the current market adjustment uneven throughout Southern California, with some areas still weak and falling and others vibrant and apparently on the rise.

Since interest rates on home loans remain favorable, the selection of homes for sale is the best in years, and buyers finally have negotiating leverage, the drop in sales must be due to one thing - consumer confusion.

Even the media seems at a loss to explain and place in a proper context home sale statistics that seem to be at odds with one another.

Home sales statewide decreased 27.8 percent in April compared to a year ago, even as the statewide median price increased 6.2 percent to $597,640, Realtor associations throughout California reported.

The apparent disconnect between sales and prices seems to be happening across the board. Local, state and national housing markets are not moving in sync.

Regardless of the market or the type of product being sold, when ever market fundamentals disconnect it typically yields confusion which, by extension, manifests in fewer sales.

Real estate professionals believe opportunities exist for an astute buyer in any market. So when the herd is fleeing, wouldn't it be wise to turn around and walk back to the center of the storm? Isn't that the perfect time to potentially reap the most reward?

Instead of waiting to see what everyone else will do in six or 18 months, the best, most favorable home purchase are available right here, right now.

About half of the state's decline in new home building comes from slowdowns in the Riverside, San Bernardino and Sacramento markets. That means new homes most likely could be purchased in those areas at extremely favorable terms with all sorts of incentives thrown in by builders.

Elsewhere in the state, since more and more people keep moving here, it means that it's only a matter of time before the public fully accepts that demand will remain strong and prices, while probably never again seeing 25 percent increases, are also not likely to see any precipitous declines.

It's been said before. It's worth saying again: Waiting yields only one thing - a lost opportunity.

By Winnie Davis, President, and David Walker