A soft landing in the housing market is looking a little more likely.Price and sales numbers released Friday, both for California and the nation, show February wasn’t all that weak compared with past years.

The news has observers hoping that there’s more strength - and less drag on the economy - than previously believed.

In California, housing sales were at their highest in eight months, posting their smallest year-over-year declines in more than a year, according to the California Association of Realtors.

Meanwhile, national sales unexpectedly improved by the largest amount in nearly three years. But analysts credited that more to good weather in the Northeast than to a real upturn.

Locally, sales in the San Bernardino/Riverside area were down nearly 38percent from February 2006, although the median price of a home still climbed 4.4 percent to $409,020.

“There is a definite weakness in the resale market,” said regional economist John Husing of Redlands. “Right now it is definitely a pricing issue.”

Demand is still present, Husing said, citing developments where new houses have sold quickly when prices are seen as affordable.

Affordability isn’t as much of an issue in the rest of the country, where the median price of a house sold in February was only $212,800.

Even that was a 1.3 percent decline from a year ago, the record seventh consecutive month in which the median price was lower than the same month a year earlier.

Much of that decline was incentives offered to draw buyers into a sluggish market, but analysts are still waiting for negative fallout from growing problems in the subprime mortgage industry.

“Our view is that the tightening in the subprime market will have a negative impact on home sales,” said David Lereah, chief economist with the National Association of Realtors. “It probably won’t postpone the recovery (in housing), but it will slow it.”

Meanwhile, the median price of a California house is still climbing, reaching $564,700 in February. That’s 5.7 percent higher than a year ago, and statewide sales were only off 9.6 percent from February 2006.

“Next month’s report could tell a different story since sales last year peaked in March,” Colleen Badagliacco, president of CAR, said in a release. “Looking forward, we are likely to see smaller year-over-year declines as we enter the traditional buying season.

“Homes that are well-maintained and are priced to reflect the realities of today’s market will continue to sell.”

Bill Velto, manager of Tarbell Realtors in Upland, said that’s exactly what’s happening locally.

“Houses that are priced at market value are selling,” he said. “We’re seeing a lot of homes selling for less than their appraised value. This is just a further step in our transition into a normal market.”

Velto said there was no reason for homeowners in cities with big price drops in February to be alarmed. In San Bernardino County, Crestline (28.9 percent), Upland (24.9), Running Springs (21.8), Redlands (16.2) and Chino (14) all fell more than 10 percent from February 2006.

“That’s just the mix of homes that sold in that month,” said. “You have to look at the overall picture - at a three- or four-month sample - to get a trend.”

Particularly now, with distressed sellers with subprime mortgages in the market.

“We’re really not going to see any dramatic drop,” Velto said. “Just the leveling off in prices that we have been expecting for several years.”

Source:

http://www.sbsun.com/ci_5511176