A competitive market pushes home prices lower

As experts across the country speculate housing prices will fall to a soft landing, local buyers are finding a packed market and competitive pricing. But for some, those single-family homes are still too costly.

Buyers such as Laura and Gerald Denham, who are retired, decided to purchase a manufactured home in Carson City in May for about $80,000. The couple believes they saved about $10,000 over buying a home in California.

"I think you are going through high prices right now," Laura Denham said Tuesday. "But it was the time that we had to do it."

With interest rates reaching 6.8 percent for a 30-year mortgage, the frantic buying period has cooled. The cost of homes leveled off in mid-2005 and is decreasing, said Carson City Assessor Dave Dawley. The frenzy started in Carson City in 2002, peaked in 2004 and has settled into a buyer's market " if you've got the cash to get in.

"We're still getting people from California willing to pay higher prices," Dawley said.

The average single-family home sold for $319,000 in the second quarter, which is about 10 percent less than the first quarter, according to the Northern Nevada Regional Multiple Listing Service. The listing service counted 134 agent-assisted home sales in Carson City.

According to city assessor records, which counted all 170 single-family home sales in Q2, the average price of a home was $347,800, only about $1,000 less than the previous quarter's average sale price.

If that is too much for buyers, the manufactured housing market is competitive, said Krisann Seiler-Tagay, general manager of Clayton Homes, in Mound House.

The average manufactured home sold for about $165,500 in Q2, according to the listing service. She estimates that number is too low because a fewer number of manufactured homes are sold in Carson City. She estimates a home with land will cost up to $250,000.

"The first of the year was great for us, and I think it was because of the stick-built industry," said Seiler-Tagay.

The average number of days on the market has also increased. More days on the market means there are not enough buyers and too much product, said Bob Fredlund, an agent with Coldwell Banker Best Sellers in Carson City.

"We've got a saturated market right now," he said. "A lot of people are trying to sell, and it's going to be a tough road ahead."

Fredlund said he believes not as many buyers are coming from California. Those who invested in a new property, second home or a resale got their business completed when interest rates were lower.

Sellers must price competitively, he said, because there are a lot more houses on the market, compared to 2005.

Federal Reserve Chairman Ben Bernanke has predicted a "soft landing" in the residential housing market, and local banker Jane Auerswald agrees.

"I think interest rates have slowed the market more than anything," said the city president of Colonial Bank. "I don't think they'll go higher;, therefore, we can have a little lull and a nice recovery in the fall."

Declining prices will continue to benefit the Denhams. They have family members who plan to move here to be close to their parents. If everything goes according to plan, their daughters will be looking for homes in Carson City next summer.

- Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.