Goal is finding the right buyer
The Vicentes initially listed their house with a Realtor at $650,000, but now are selling it themselves for $495,000.
It used to be about finding the right house. Now, for sellers, it's about finding the right buyer.
It has been 13 months since Rose and Manny Vicente put their Simi Valley home up for sale and started boxing possessions.
They originally listed their 1,831-square-foot, five-bedroom, 2.5-bath house for $650,000. In August, they lowered their asking price to $595,000. Back then, they thought that it might take another month or two to sell.
Rows of stacked boxes have sat collecting dust ever since, and the Vicentes have lowered their asking price to $495,000.
"We didn't want to, but in order to sell, we didn't have much choice," Rose Vicente said. "I'm surprised it's taking this long."
With the influx of foreclosures flooding the market, the cooling market is freezing out traditional home sellers like the Vicentes.
"That's a common reality that people have to deal with in today's market," said Mike Anderson, a real estate finance instructor at Ventura College.
Buyers want bargains and are shopping mostly for short sales and other distressed properties. Since the credit crunch in August that has made it more difficult to secure financing, there has been more activity among lower-end properties.
That, along with price depreciation, has contributed to a sharp decline in the county's median price, which fell 26.3 percent to $435,000 in May from $590,000 a year ago, DataQuick Information Systems reported Monday. The median is the midpoint, where half the homes sold for more and half for less.
This is the lowest that the median price has been since February 2004, when it was $430,000.
After edging up in April for the first time since August, the county's housing sales and the median price recoiled in May, dashing some expectations that the market had reached a turning point. In April, the median price was $445,000.
17.8 percent drop over year
There were 708 transactions for new and existing houses and condominiums in May, a 17.8 percent drop from 861 a year ago, according to DataQuick. That was also a slight decline from 771 in April.
It was the lowest sales for any May, according to DataQuick's records, which date back to 1988.
About 30 percent of the county's resale activity in May were homes that were foreclosed on in the past year, said Andrew LePage, a DataQuick analyst. The previous May, these sales represented 5.4 percent, and just 0.4 percent two years ago.
"Then it was a nonfactor; now it's nearly a third of the market," LePage said.
Sales remained especially slow in most higher-end markets, with jumbo mortgages comprising only a slightly higher percentage of all purchase loans in May than in April, LePage said.
In the Conejo Valley, the median sales price for single-family homes last month was $688,680, down from $828,571 a year ago, according to the Conejo Valley Association of Realtors.
"The market remains extremely slow, but you do see relatively robust areas," said LePage, referring to areas with deeply discounted properties.
Pockets in Oxnard, Moorpark, Port Hueneme, Ventura and Simi Valley have reported positive year-over-year change in sales for existing, single-family detached homes.
Sales across Southern California rose in May from April, but were significantly off from a year ago. A total of 16,917 new and existing houses and condos closed escrow in May, up 8.3 percent from 15,615 in April, but down 14.9 percent from 19,874 in May last year, according to DataQuick.
Areas hit hardest by price depreciation and foreclosures — namely Riverside County — were the most likely to post year-over-year sales increases, DataQuick said.
Southland median falls
The median price paid for a Southern California home was $370,000 last month, a 26.7 percent decline from $505,000 a year ago — the result of "sluggish high-end sales, more sellers dropping their asking prices and lenders selling off more of their aggressively priced, repossessed homes," DataQuick reported.
If sellers want to sell, they have to price their homes aggressively to compete in this market — unless they are in a position to wait for a comeback, real estate agents say.
"Prices are not what they were two years ago," Anderson said. "It's a tough tale for the seller to swallow."
These days, serious sellers need to get creative and consider offering a lease-to-own option, paying closing costs or other seller financing, such as paying down the mortgage for the first two years, he said.
Most of all, sellers need to be willing to lower their price, said Vickie Howell, a Realtor with Century 21 The Elite Group in Simi Valley and former Realtor for the Vicentes. She says she had suggested lowering the price substantially to compete with nearby distressed properties.
This is not the market to test the waters, Howell said.
"If you're not priced very well, or are not a short sale or foreclosure, you're just not going to get a lot of people to your house," Howell said. "You've just got to ride it out."
The Vicentes are willing to delay their plans to move to Texas to be with their daughter until they find the right buyer.
"I want to move, but if it takes sitting on it for another year or two, than that's what we'll do," Rose Vicente said.
Realtors have told them that if they want to sell immediately, they should lower their asking price to $395,000.
"My husband has worked too hard all these years to just give it away," Rose Vicente said. "This is an investment for our future."
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