Take a look at this article from the Record Searchlight. It confirms what I have been telling my clients for the last 6 months. The market has declined about as far as I think it will. We will be bouncing up and down for a while but I believe the trend will eventually turn upward. With interest rates at historic lows (around 5%) the prices are even better. A 1% increase in the interest rate is equivalent to about a $20,000 price increase. Now is the time to be buying in my opinion.

"Shasta County home values have hit the bottom, economist David Gallo told a gathering of community leaders Wednesday in Redding - an opinion borne out by median sales prices, which were up for the third straight month.

"Don't you already see some signs of that in Redding?" Gallo said of a housing recovery during a two-hour presentation at the McConnell Foundation. "I think if mortgage rates and points remain at current levels, we can expect to see rising home values within a year."

Gallo's forecast is based in part on the trend line of inflation-adjusted home values in Shasta County that he's tracked since 1999. The actual median value of homes in Shasta County has never dipped below the trend line - until recently.

"I've concluded housing prices have bottomed out," Gallo said.

Gallo's prediction came as statistics released this week by DataQuick Information Systems show the median sales price of a home in Shasta County in August rose for the third month in a row. The median is the price where half the homes sold for more and the other half for less.

DataQuick reported that the median sales price in August was $201,250, up from $190,000 in July. The median sales price in August 2008 was $225,000.

Home values in Shasta County bottomed out for the year in March when the median sales price plunged to $177,000.

The median sales price in Shasta County peaked in March 2006, when it reached $300,000.

But while values are up, home sales in Shasta County in August dipped to 148, down from 180 in July, and were at their lowest level since April, when there were 131 closed escrows.

It's a sign that the area's housing market is still somewhat volatile.

Told of Gallo's forecast, two north state real estate agents said values have stabilized in some price ranges, namely for homes priced below $250,000, where multiple offers aren't uncommon."