It’s still a seller’s market in Ceres and Stanislaus County but, surprise, owners aren’t selling all that much.
In fact, “for sale” signs in front of houses are as scarce as gnats in a windstorm.
The reason sellers aren’t selling, said local real estate agent Eric Ingwerson, is because they have few options for a new home other than leave California, which is in very short supply on home building.
“When Joe Biden got in there – I’m not going to say that he was responsible for that – but the interest rate wasn’t like that when the Trumpster was president,” said Ingwerson, an agent with the PMZ office in Turlock.
“When we were in a normal market, per se, east of the freeway at any given time there was at least 75 homes of the market; west of the freeway, 75 homes. Normal average inventory in Ceres was 150. Sometimes now it hovers around 30. That is seriously low, low, low.”
Home building came to a grinding halt during the mortgage crisis of 2008, Ingwerson explained.
“If you go out and buy a piece of land and want to put a subdivision there it’s going to take you at least two years to get it all through the process, get your offsite improvements like curbs, gutters, sidewalks and then start building homes.”
He cited how long it’s taken for K-B homes to be constructed in Hughson just east of Ceres.
High interest rates have also chilled the housing market. Ingwerson said interest rates of 2.5 or 3 percent interest rates some present homeowners enjoy will disappear once they sell their home and are faced with paying much higher rates of 5.5 to 7 percent if they must finance part of their new mortgage.
Renee Ledbetter who is with EXIT Realty Consultants in Ceres said when and if the feds lower interest rates, “it will become a feeding frenzy again for buyers.”
“Buyers are still on the fence because interest rates haven’t dropped,” Ledbetter said.
Sellers without enough equity are largely not willing to give up their two percent interest rates to finance the gap the next house, she said.
The industry’s expectation is that rates will drop sometime before the election. Nobody knows just when.
Ledbetter said her focus has been to educate buyers to get a head start if they plan to seek down payment assistance or to get pre-approved for a loan. Certification for the CalHFA (California Dream For All) assistance program is good for 12 months.
“Even if they’re not ready to buy right now and they want to wait for a few months, at least they’ve knocked that requirement out of the way … so when a house does come up on the market that they want to make an offer on, they’re good and ready to go.”
Ledbetter said the market is in the seller’s favor, she’s seeing a lot of sellers offering incentives like credits toward closing costs and making repairs.
“It’s still a seller’s market because we don’t have enough inventory and we still have a huge buyer demand but buyers are being very meticulous, they’re being very cautious. Nobody is just diving in. Nobody wants to pay above list price but it’s going to change once the interest rates drop because then the buyers are going to start coming out and home prices will eventually go back up.”
Ledbetter said many sellers are moving out of California, primarily to Idaho, Arizona, Texas and Tennessee.
Houses which are selling fastest are those in the $300,000 to $500,000 range with homes priced at $600,000 and above are taking longer to sell, Ledbetter observed.
