The median home price in Yuba City finally seems to be showing some signs of stabilizing. The median home price peaked in November of 2005 at $352,950 and then began a rapid decline. It reached a low point of $277,000 in January of 2007. It went up to $280,000 in February and hit $300,000 in March.

There is more good news for home sellers. It does not appear that prices will fall as much as they did in the housing recession of the early 1990's because housing oversupplies have not been as dramatic as they were then. The number of months of inventory on hand during this recession has averaged around 6 to 8 months. During the housing recession of the early and mid 1990's, there was typically 12 to 14 months of inventory on hand.

California's population continues to increase by about 500,000 people per year but builders are producing less than 190,000 new housing units annually. A cumbersome planning process and high building fees are two major factors limiting new home construction and neither is likely to change.

Reports indicate that vacancy rates are dropping in most metropolitan areas in the west. Many people who are able to purchase have been renting instead while they watch home prices decline. These market watchers will begin to purchase as prices stabilize and rentals become more expensive and difficult to find.

Kiplinger, in their newsletter several months ago, predicted that a surging Chinese economy will begin to generate excess cash that will be invested in real estate in Pacific Rim countries. This is what happened in the early 1990's when the Japanese economy was so strong.

Interest rates remain low and the economy continues to grow at a modest pace.

While there is reason for optimism over the long term, there are still plenty of potential problems in the near term.

We continue to see record numbers of foreclosure properties.

Several sub prime lenders have been forced out of the market recently and Congress seems poised to further restrict the availability of credit. Tightening credit supplies will have at least some adverse affect on sales volume.

Spring sales volume has remained low even though this is normally the busiest time of the year. Housing inventory has been creeping up and the number of months of inventory on hand continues to fluctuate between 6 and 8 months.

Don't be surprised if prices decline further in the short term.

2

1

1008

$199,000

$75,000

3

2

1647

$369,000

$300,000

3

2.5

1560

$210,000

$141,000

4

2

2109

$329,000

$303,000

2

1

1222

$225,000

$208,000

3

2

1625

$319,000

$305,000

2

2

956

$227,000

$215,000

3

2

1498

$307,990

$307,990

3

2

1487

$219,900

$219,900

3

2

1643

$340,000

$310,000

3

2

1500

$229,900

$227,000

4

2

1871

$314,900

$314,900

3

2

1381

$223,500

$227,000

4

2

1832

$354,900

$315,000

3

1

1000

$229,000

$235,500

3

2

2133

$337,000

$315,000

2

2

1429

$239,500

$240,000

3

2

2038

$329,990

$315,500

3

2

1399

$239,000

$243,000

4

2

1814

$344,990

$319,000

3

2

1077

$268,900

$247,900

4

2

1789

$329,900

$319,500

3

2

1156

$269,900

$250,000

3

2

1675

$329,900

$325,000

4

2

1599

$239,900

$252,000

3

2

1860

$340,000

$325,000

2

2

1016

$269,900

$252,500

5

3

2514

$394,926

$343,192

2

1

1389

$260,000

$255,000

3

2.5

2000

$379,900

$345,000

3

2

1580

$299,000

$258,000

3

2

1950

$365,000

$345,000

3

2

1508

$290,000

$268,000

4

3

2615

$352,900

$349,900

3

2

1583

$289,000

$275,000

3

2

1836

$374,000

$367,000

4

2

1618

$295,000

$279,000

3

2.5

2217

$375,000

$372,000

4

2

1608

$288,422

$281,000

3

2.5

2188

$394,990

$372,990

3

2

1752

$296,000

$282,000

3

2

2410

$399,000

$375,000

4

2

1706

$340,000

$288,000

4

3

2443

$398,990

$392,500

3

2.5

1919

$299,950

$295,000

3

3

2622

$424,900

$410,000

4

2

1715

$295,000

$295,000

5

3

2816

$464,900

$412,500

4

2

2004

$324,900

$296,000

5

4

2922

$429,071

$419,310

3

2

1710

$299,900

$299,900

3

2

2010

$450,000

$430,000

4

3

2138

$319,900

$300,000

3

2.5

3000

$465,000

$465,000

4

2

1832

$309,000

$300,000