Seeing the silver lining in Napa real estate

By JENNIFER HUFFMAN
Register Business Writer

Napa County Realtors have spotted some good news out there in the slumbering residential real estate market. While the market is still slow-moving, vineyard properties and higher-end homes are attracting attention.

Overall, the number of homes listed for sale in Napa County hovered at a near-record high in August, while the number sold dipped 20 percent compared to a year ago.

According to Trendgraphix data, in August 879 homes were listed for sale in Napa County, compared to 806 a year ago. Sixty-seven homes sold last month, compared to 83 a year ago.

American Canyon real estate sales remained stagnant, with a record 167 homes listed but only four homes sold in August, the same number as July. At this rate it'd take 41 months to sell current inventory.

But things may be looking up in the south county city.

"We're starting to see some investor activity," said David Barker of ReMax in American Canyon.

"I had an investor call me yesterday who called from out of the area. He's looking for rental properties. The ones with the money are starting to surface and looking for deals."

"American Canyon (prices) are fantastic compared to the rest of the Bay Area," noted Barker. "These homes do represent excellent value."

Median prices in Napa County remained steady from this time last year, at $675,000. Real estate professionals say they believe that figure is being buoyed by the sale of higher-priced homes Upvalley.

"The medians are holding because the units that are selling are the upper end properties," said Mike Silvas of Morgan Lane Real Estate.

Silvas said the slow conditions are affecting more modest properties. "Our first-time market is now roughly $400,000 to $750,000, and that's what's been impacted," he said.

"When looking at individual neighborhoods (where homes are priced) at $750,000 and under, there was no appreciation from 2004 to 2006. We're back to 2004 prices in the lower end of the market. I don't think we've seen a decline in prices. It's just flattened out," said Silvas. "We're telling buyers this is the kind of market smart people buy in. This is a good time to buy in those lower price ranges.

"We're telling our sellers if they don't have to sell, they should not be in the market," he said. "This certainly is not a time to test the market."

Gerrett Snedaker with Frank Howard Allen Realtors said each seller deals with his or her listing differently.

"Some sellers are frustrated with the lack of showings and offers. Some are voluntarily reducing their prices to make their homes more attractive," he wrote.

On the other hand, "Many buyers are being more demanding -- asking for repairs and credits. In the seller's market, the buyers were less likely to ask the seller for credits."

Snedaker also analyzed changes in the higher-end market.

"In 2005, between 15 and 25 percent of homes were purchased as either investment properties or second homes. This market has all but dried up, though we are still having healthy activity in second home sales -- particularly in the higher end. That's why sales are down in most of our markets. I believe that the underlying demand for wine country properties remains strong."

According to Mike Bolen of Intero Realty, "The most interesting thing is the difference between the average asking price and average sale price."

For August, the average high-end asking price was $1,034,000. The average sold price was $884,000, a difference of $150,000. One year ago, the difference was $334,000.

"Month after month it is narrowing," said Bolen. "That tells me sellers are becoming more realistic in their price expectations."

"As the number narrows, sales will pick up," predicted Bolen. "I see the narrowing of the number to mean that we will be in a better market sooner rather than later."

Bolen is also seeing the lower end condo market opening up, with prices dipping below $300,000. "It means there's better opportunity out there for better qualified buyers."

Upvalley, Heidi Rickerd-Rizzo of Pacific Union GMAC reports "We have found that our sellers, while very anxious about days on market and lack of early offers, seem much more willing to try to come together with the buyers who are coming to the table. When there are real sellers and real buyers, there is a sale to be made."

"We are also finding that larger properties with wine development potential are very 'hot' right now. My associates are representing sellers more willing to work through difficult issues to keep the sale moving forward," she wrote.

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