By Kelley Atherton
Triplicate staff writer
Not many people would consider 2007 to be a good year for the housing market as sales slid from a peak in 2005.
The good news is when the market slows, prices go down and buyers slowly come back into the market. Essentially, if you lower prices they will come.
This is especially true for Del Norte County. Ming Tree Realty Agent Fran Gatti calls it a "buyer's market."
"Now is the time to buy a home," she said. "Prices are good and sellers are motivated."
The median sale price dropped about six percent from 2006 to 2007, from $225,000 to $211,750, according to Multiple Listings Service (MLS) data.
"That's lower than our last big year in 2005 and it's been declining since then," Gatti said.
Gatti said properties still in escrow right now might affect the statistics for 2007 and the current numbers might change. She tracks monthly MLS housing reports for the county and housing developments on her blog, http://activerain.com/blogs/frangatti.
Re/Max Coastal Redwoods Agent Mike Nolan said the market is in a transitional period. Listings are staying on the market for an average of 120- 180 days rather than a few years ago during the buying frenzy, when listings stayed on the market for an average of just a few weeks.
"The market is in a state of transition from a hot market we experienced a couple of years back to more normal conditions," Nolan said.
Del Norte County is actually better off being a remote, coastal area.
"It's not as bad here as it is for the rest of country," Nolan said. "We're lucky to be here where people want to retire and get out of metropolitan areas. We're waiting for them to come back. We're looking for a good spring season."
Gatti said she thinks prices will mostly hold steady for the next year, possibly dropping slightly more before rising again, which is the cyclical nature of the market.
"I don't think it's going to get worse," Gatti said. "But prices will hold, maybe decline a little, but not as drastic as before."
The housing market started to slow in 2005 after prices rose into the $300,000 range. According to MLS data, 212 houses sold in Del Norte last year, a decrease of 14 percent from 2006, when 247 houses sold. The volume of sales decreased as well, to $50 million last year from more than $61 million in 2006.
Many people who bought homes in 2005 watched the value of their homes fall in 2006 and 2007.
"Prices in 2005 peaked really high," Gatti said. "There's not a lot of people who can afford (those prices), even though the median prices are lower than everywhere else."
A big part of the slow housing market is the foreclosure crisis. Many people are not able to afford their increasing subprime interest rates, putting a crunch on lenders and sending homes into foreclosure. On Dec. 6, President Bush announced a freeze on subprime interest rates for five years. However, critics claim that this is only a temporary fix.
Foreclosures do not dominate the market in Del Norte. The county has the third lowest foreclosure rate in the state, according to Gatti.
But nationwide events do affect even remote areas.
"There's no way to discount the effect the subprime disaster had on the real estate market," Gatti said.
Lending standards have tightened up since then and not as many people are qualified for mortgage loans, so therefore there are less people able to afford a home.
Gatti said that buyers should be approved for a mortgage before looking for a home. She warned that even though they might have been approved months ago, standards have changed. Potential buyers don't want to find out too late that they can't afford the home of their dreams.
Gatti is optimistic about the local real estate market, saying Del Norte County is a prime retirement spot.
"This is the perfect time for buyers," Nolan said. "Don't wait for everyone else to get back in the market."