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Published on Saturday, Sept. 3, 2005, in the Tracy Press.

The number of homes on the market in Tracy has skyrocketed and homes are not selling nearly as fast as they were earlier in the year.

“It was pretty wild at the beginning of the year,” said Dave Konesky, a broker with Prudential California Realty on West 11th Street and a board member with the California Association of Realtors. “There just wasn’t any inventory to show, so people were buying just to get into the market.”

In other words, a home that would sell within days at the beginning of the year will more likely be on the market for nearly a month before it sells now.

“The median price hasn’t dropped and we’re always monitoring this,” he said.

“However, we are seeing some price reductions.”

The Central Valley Association of Realtors reported that Tracy agents sold 1,248 homes in the first seven months of 2005, a 19 percent increase over the 1,046 homes sold last year. This year the increase in sales happened in the first five months of the year, with the busiest months, June and July, about the same as last year.

The median price in Tracy has gone up and down this year: down to $455,000 in February, up to $505,500 in April, back down to $494,000 in May and back to an all-time high of $519,250 in July.

Local agent José DeLange of ERA Executive Real Estate on West 11th Street said the change is in the number of homes that are on the market today. At the start of the year, there were about 40 houses for sale in town. That grew to 70 three months ago and about 400 today.

DeLange said it’s not that fewer people are buying, but more people are selling. Those who are selling will either have to be patient or rethink their asking prices.

“In my experience we still have a great amount of buyers, but I think everyone, including investors, thinks we’re at the top of the market,” she said. “Homes are still selling if they have the right price. We went from a seller’s market very quickly to a buyers market.”

Jack Klemm, broker with Preferred Real Estate Group on Grant Line Road, said part of the reason is that the spring, generally the best time for home sales, was especially active this year.

He also affirmed that there are more houses for sale today. He recorded 88 homes for sale on April 1 in Tracy and 379 for sale on Aug. 26. He said that could affect prices, especially for the houses listed for over $500,000, which are still the more expensive homes in town and spend more time on the market.

“Some are already starting to adjust their prices to stay competitive with the increased inventory,” he said.

Robert Kleinhenz, deputy chief economist with the California Association of Realtors, said statewide there are more houses for sale than last year when the number of homes on the market reached an all-time low.

“This year we saw inventory go from rock-bottom level to 50 to 100 percent more than what they were last year,” he said.

Kleinhenz said the real estate market typically cools off in late summer and picks up again in spring. He also hears about fears of the real estate price “bubble” bursting, and acknowledges that prices will level off, but he doesn’t see any indication of a precipitous drop.

“At the state level and regional level we’ve observed that you really need some big economic disturbance that erodes the economic underpinnings of the housing market,” he said.

Massive job loss in a region, for example, could put too many houses on the market at once.

What’s more likely to happen, he said, is that homebuyers and the institutions that loan them money are going find the limits of creative mortgage options, which would limit the number of potential buyers until prices either come down or level off.

“Our informal outlook for next year is a reasonably strong market in sales activity and for median sales prices to go up,” he said. “We’re probably going to predict a smaller percentage gain.”