Whither the Market?

It's almost Memorial Day and the "official" start of summer for most people. And in N Ca, the start of the slowdown in home sales for the summer. We hit the "summer doledrums" in August and Sept but the slowdown starts now.
April sales in southern Santa Clara County were down slightly from March and also February except in our weak spot, homes above $1M. Some good news there at last! Rural inventories climbed in April as the did in all categories except the entry level below $400,000.
The NY Times reported on Monday that banks are holding approximately 872,000 homes in foreclosure on their books at present with more in some stage of pre-foreclosure. In April, 40% of all  Santa Clara County real estate sales were short-sales. On average, 66% of these will not close and likely end up in foreclosure. So the pipeline of foreclosed homes will still have significant volume if down from previous months (especially during 2009 and 2010).
Mortgage rates average 4.6% for a 30 year fixed rate loan this week and have been bouncing around at that level for several weeks.  But lender requirements remain tight.
What does this mean for our summer home sales? Likely more of the same that we have seen the past month or so. A gradual slowdown in sales activity due to seasonality but also due to gasoline prices (which thankfully are receding somewhat!). Entry level home sales will remain popular especially when values are compared to those in southern Silicon Valley and San Jose. Patience will remain a pre-requisite for sellers, while buyers should have greater choices. "Steals" aren't  going to happen but good values will continue to be available for buyers who can look ahead four or five years. The upper tier will remain weak as loans and buyers are both hard to come by over $1M. Unless your property has a unique advantage (equestrian facilities, views, amenities AND price), the going will be tough at the high end.
Now, even more than ever, if you are buying or selling you need a professional in your corner.