Tuesday, October 13, 2009

Housing Prices Continue to Tumble

Posted By on Tue, Oct 13, 2009 at 2:26 PM

click to enlarge sold_prices.jpg
In August, homes in Arcata reached their highest affordability level in more than five years while countywide affordability reached its second-highest mark since May of 2004, according to data released today by the Humboldt Association of Realtors.

The median price of homes sold in Humboldt County during August fell to $259,000, down $16,000 from the previous month's level. This translates to an affordability index rating of 23 percent, meaning a family earning the median income makes 23 percent of what's necessary to qualify for a conventional loan on the median priced home. (Confusing, I know. Here's a more detailed explanation.)

Since May of 2004, countywide affordability has been higher just once (in June, when it blipped up to 25 percent).

Affordability has yet to reach pre-housing-bubble levels, which hovered between 40 and 50 percent in Humboldt County.

The fastest freefall is taking place in Arcata, where the median price of homes sold during August was $306,000, down from $330,000 in July, $395,000 in June and $447,250 in May. (This during harvest season!)

These data run counter to recent speculation in the Times-Standard of a housing rebound , posited by real estate broker and former president of the Humboldt Association of Realtors Marc Matteoli. While Matteoli is correct that the local market didn't inflate quite as much as others during the bubble (a word he puts in quotes), one might quibble with his assertion that, "Somehow, we have dodged the major downward shift in residential real estate values."

August's median sold price in Humboldt County was down 26 percent from the peak of $349,500, reached in March of 2006. And housing authorities are saying we have yet to hit bottom. Yesterday, David H. Stevens, head of the Federal Housing Administration, told a group of mortgage bankers in San Diego that all signs point to a further 10 percent drop in home values nationwide by the first quarter of next year. (Get the full story here .)

To his credit, Matteoli didn't hide all the bad news. For example, he noted that the total number of homes sold this year is projected to be roughly half the number reached in 2006 2004. (Actually, he said the peak sales numbers were reached in 2006; then in the following paragraph said it was 2004. We'll assume here that the latter date is correct.) However, his subsequent assertion (namely, that " our average price is actually higher than the year of peak sales" ) is misleading since prices didn't top out until two years later.

Anyway, here are a few more August stats: Eureka's median sold price also fell for the third straight month, settling at $234,000. McKinleyville held more or less steady with a median sold price of $268,000. Fortuna, meanwhile, bucked the trend by increasing $12,000 over the previous month to a median sold price of $272,000.

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Ryan Burns

Ryan Burns

Ryan Burns worked for the Journal from 2008 to 2013, covering a diverse mix of North Coast subjects, from education, politics and marijuana to human suspension, sex parties and amateur fight contests. He won awards for investigative reporting, feature stories and news coverage.

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