The real estate market remains slow compared to the over heated market that we had in recent years. Most of the people I talk with compare this as a market crash, not realizing that the market was over heated and had to slow to a more normal state. They are also concerned that they have lost a lot of money in real estate because of the hype in the media. Considering the tremendous increase in real estate values over the last few years, this can only be true of those people who bought at the top of the market, not those who have had their homes for more than three years or longer. Even those who bought at the top of the market will come out all right in a few years if they stay with their property and don’t have to sell.

Prices in some cases doubled or more in just six years. As prices increased, the affordability index, that is the number of people who could afford to buy a home, decreased. However, this has happened many times in the past, with people saying that prices will never raise again or that it will take years for the market to come back up. Of course this is not true in California. There are many reasons for this, as the worlds eighth largest economy, our continuing population growth, the scarcity of land and of course the increasing bureaucracy that makes it more expensive to develop land and build homes.

Here’s what is going on in Nevada County residential sales from January 1 to June 30, 2007 compared to the same period last year.

RESIDENTIAL SALES

Current Period Sold 1,090 residences, Volume Sold $515,371,836, Median Sale Price $472,818

One Year Ago Sold 1,490 residences, Volume Sold $739,200,591, Median Sale Price $496,108

Increase/(Decrease) (400) -27% Volume Sold ($223,828,755) -30% Medium Sale Price Change (23,290) -5%

So we’ve had a decrease in sales of 30 percent and a price decrease of 5 percent. Not bad overall considering that tremendous increase in real estate prices in previous years. In the year 2000, the medium sales price in Nevada County was $198,000. In 2001 the medium price increased 16 percent to $229,900. Now six years later we’re at a medium price of $472,818 or a 205 percent increase in sales price compared to 2001.

John O’Dell is a licensed real estate broker, civil engineer and general contractor