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Home prices on upswing in Yuba-Sutter
The long, painful slide in Yuba-Sutter real estate can be said to be finally over. In its place? Appreciating prices, tight inventory, and homes new and old in demand.
According to October figures from real estate information service DataQuick, Inc., the median price of homes in Yuba County jumped from $115,750 in October 2011 to $143,000 last month. The 23.5 percent uptick was the largest of any county in the Sacramento area last month.
While October data for Sutter County wasn't available, Lloyd Leighton of Lloyd Leighton Realtors in Yuba City said his information shows median prices there went from $150,000 in September 2011 to $171,000 in the same month this year.
"Certainly, we're moving up in terms of prices," he said.
There are a number of reasons why, Leighton said, but they include a drop in foreclosures, low interest rates and affordability. With a decent down payment and a loan financed through the Federal Housing Administration, for example, he said it's possible to have a lower mortgage payment than monthly rent.
Leighton said the upward momentum in prices became really noticeable at mid-year, when inventory in Yuba-Sutter had dropped by almost half from six months earlier. On Dec. 1, 2011, there were 467 homes for sale; by June 1, the number had dropped to 250.
The director of economic research at ForeclosureRadar.com, which tracks foreclosure trends, said there's a direct parallel between fewer homes going back to the bank and prices for other homes rising.
"There's a certain pool of foreclosures out there," said Madeline Schnapp. "Over time, you're just beginning to deplete that pool."
To a lesser extent, a slowdown in short sales also helps prices appreciate, though such homes can also inflate homes if there are multiple bidders, she said.
Last month, Sutter County saw a 133 percent gain in the number of short sales compared to a year earlier, with 21 versus nine. Yuba County saw a drop in short sales from 13 to nine in October year-over-year, while both counties continued to see a decline in actual foreclosures.
With supply and demand in flux, a largely dormant part of the local real estate market is re-emerging: new homebuilding.
Though the numbers are modest, one broker who specializes in small-scale new home development in Yuba-Sutter said sales numbers for such homes have tripled in 2012 over last year.
"We've had price increases based on appraisals," said Jim Dusa, with Prudential California Realty in Yuba City. "There's daylight. And we're as excited as can be to get a foothold in the market again."
Because of appreciating prices, Dusa said, local builders constructing houses on Erle Road near Edgewater, and another one just starting new projects in Plumas Lake, are seeing a profit margin on sales again.
If the trend continues, larger homebuilders will begin ramping up as well, possibly as soon as next year, Dusa said.
"The small builders typically lead us out of the market," he said. "We're already looking at a strong 2013."
But if many of the trends are the same, consumers shouldn't think it's 2004 all over again, Leighton said.
"All these crazy loan products out there, that's no longer the case," he said.
Of more concern now are high levels of federal debt, he said, with the potential for either inflation, higher interest rates, or even more dire outcomes.
"How that will translate, I just don't know," he said.
CONTACT Ben van der Meer at firstname.lastname@example.org or 749-4786. Find him on Facebook at /ADbvandermeer or on Twitter at @ADbvandermeer.