Real Estate Tidbits

February 2010: This Month in Real Estate

January 2010: This Month in Real Estate

Short Sales Dominate Sacramento Real Estate Market

The Sacramento real estate market has changed quite a it over this past year.  Last year at this time, we were seeing a huge number of REO properties (foreclosures or bank-owned homes) in our marketplace.  In fact, foreclosures practically dominated the market.

Today is much different.  Short sales dominate. In fact, as of December 28th, about 61% of all homes on the market in Sacramento County are short sales while only 13% are foreclosures.

The numbers break down this way:

• Total homes for sale: 5,888
• Short sales: 3,582
• Foreclosures: 783

So, what's expected in 2010?  Of course, nobody knows for sure; this real estate market, along with the economy, continues to baffle the best minds in the business. However, most think that short sales will continue to play a major role in the market over the next 12-36 months, maybe longer. 

Foreclosures will likely increase, too, as more and more homeowners default on their mortgages. While lender and government attempts to stem the foreclosure rate are helping somewhat, they are not having the impact many had expected.

If you have any questions about selling your home, even if you owe more than it's worth, give us a call ASAP.  With the market continuing to change, now may be the best time to sell to maximize the price you can get for your home.

Source: MetrolistMLS. Information deemed reliable, but not guaranteed.

December 2009: This Month in Real Estate

Sacramento Real Estate Statistics - Oct 2009 vs Oct 2008

Here are some interesting statistics for the Sacramento real estate market. Actually, these stats cover single-family homes in all of Sacramento County.

In October 2008, there were 8,038 homes for sale. One year later, in October 2009, there were 3,325 for sale. This is a decrease of 58.6%.  This is a positive sign and should help level out decreasing property values. Remember, when supply decreases, demand increases. When demand increases, values eventually rise.

The number of homes sold also decreased from last October 2008 to the same month one year later from 2,154 down to 1,634, a decrease of 24.1%.

However, pending contracts - those homes IN contract - increased by 7.1%. October 2008 pending contracts was 2,236 and one year later, there were 2,395 contracts pending. Demand is rising.

The average sales price for single family homes in October 2009 was $208,000, a 1.9% decrease from the same month a year earlier at $212,000.  However, that $208,000 price is a 2% INCREASE over the month before when it was $204,000.

So... what does all this mean?  It appears that market values may (and that's a big "MAY") be starting to level out. We're seeing price levels starting to stabilize, and even increase a bit, in the lower price ranges.  However, the higher priced homes - those over $300,000 - still struggle in the current market.

And don't be fooled by national statistics. Remember, all real estate is LOCAL and national stats don't really paint an accurate picture. By saying prices increased by a "average" amount nationwide is like saying the nation's "average" temperature is 70 degrees. That's not helpful at all. So, pay attention ONLY to local stats.

Source: TrendVision - Sacramento MetrolistMLS - deemed reliable but not guaranteed.

November 2009: This Month in Real Estate

Sacramento Real Estate Update: Homes Under $200k Selling Fast

Everyone knows the real estate market has struggled over the past few years, but we are starting to see some improvement in the lower price ranges.

While many homes are still declining in value and struggling to find their footing, many properties in the Sacramento real estate market under $200,000 are selling fast and retaining their values fairly well.  There's even some signs of appreciation in that price range.

Of course, a large number of homes in this price range are bank-owned (foreclosure) properties and therefore don't have sellers that then move up to higher priced homes (thus stimulating those price ranges, too). This is really what we need to see a stronger recovery in our market.

Overall, this is a positive sign and we hope to see continued support that these lower levels. It should eventually "trickle up" and affect higher price ranges, too.  Although we will not likely see a return to 2004 and 2005 price levels for a long, long time.

October 2009: This Month in Real Estate

Real Estate "Myth-Understanding" #5: Sellers Should Wait to Sell Until the Market Recovers

Our fifth "myth-understanding" discusses a concern that would-be sellers have had for quite a while now - that they shouldn't sell until the market gets better.

Myth-Understanding: For homeowners wanting to sell, they should wait a couple years until the real estate market "recovers."

Truth:This could be correct thinking for some people, but their time lines may be off. Some market "experts" predict it could take another 5 - 7 years or longer before prices truly "recover." Once the market "bottoms out," it may still take a few years for home values to appreciate back up to "acceptable" levels. If a homeowner wants or needs to sell within the next few years, then NOW may indeed be the best time in order to maximize their equity and not lose additional value by waiting.

Of course, nobody truly knows what the market will do. It's important for those homeowners considering selling, to contact an experienced, knowledgeable Realtor to discuss how their situation fits into the current real estate market.

September 2009: This Month in Real Estate

Home Buyers Try to Time the Real Estate Market

Some buyers are trying to time the bottom of the market and purchase once it appears that prices are at their lowest.  Many housing forecasters and real estate professionals advise against this approach as buyers should not view their homes solely as investment opportunities. And trying to time a market bottom can be risky. 

Of course, the only proven way to truly know when a market - any market - has bottomed out, is when it starts rising again.  And, by that time, the best opportunities may already be gone.

Historically, the average annual rate of return on a home lived in for five years or more is nearly 12 percent, based on data California Association of Realtors has collected over the last 40 years. So, buying "the right property at the right price" in any market is often the smart way to go.

First-time home buyers can certainly take advantage of the amazing opportunities available right now in today's market.

Be sure and connect with an experienced, savvy Realtor to assist you in your home search.

Other great articles include:

Buyers Often Miss "Great" Deals for "Better" Deals

The 3 Most Important Steps on the Path to Buying a Home 

Looking for Even More Real Estate Tips, Tricks & Techniques?

Sacramento Real Estate: Distressed Properties Help Homes Sales Soar

Sales of existing homes are soaring as many investors and first-time buyers purchase distressed properties (foreclosures, short sales, fixers, etc.).  It is estimated that about 50 percent of current sales involve distressed properties, and it is expected by many that the trend will continue as foreclosures rise in the months ahead. This is happening in the Sacramento area and throughout the country.

It is truly a great time to buy, either as an owner-occupant or as an investor. Due to extremely low home prices, first-time home buyers are again able to afford to buy. This is a nice relief for renters and those who have wanted to make their first purchase since they were priced out of the market just a few short years ago.

And, contrary to popular belief, not all foreclosures are dumps.  While some are, most are in good shape or require very little work - sometimes just some paint and new carpet.

More Foreclosures May Be Coming

Despite efforts by lenders and the government to prevent foreclosures, many economists and housing analysts predict there will be another wave of foreclosures by the end of 2009, and many of those properties will be offered for sale.  According to the U.S. Comptroller of the Currency, 53 percent of loans that were modified in the first half of 2008 fell back into arrears.

More foreclosures on the market for sale may put additional downward pressure on property values, but if released slowly into the marketplace, may not have too much of an effect.  It's hard to predict what the market may do over the next 12-18 months, but if you've been thinking of buying or investing, it is truly a great time.

August 2009: This Month in Real Estate

Market Stabilization or Continued Price Declines?

Yes, we're starting to see some evidence that home prices are leveling in many real estate markets around the country, as well as here in California.  Of course, we won't know for sure until the coming months, but may be some reason for optimism.

And although some skeptics believe the market is pausing before home prices decline further, the median price in California’s housing market appears to be stabilizing.  June marked the fourth consecutive month of rising home prices and the second largest gain on record for the month of June, based on statistics dating back to 1979.  The year-to-year decline in June also was the smallest in the past 16 months.

Multiple Offers Common and Frustrating Most Buyers

Multiple offers are common these days.  It seems like we've been here before... and we have... just a few years ago.  This time, however, it's mostly the foreclosure properties that are attracting more buyers and multiple offers.

Multiple offers often lead to a higher sales price and many disappointed buyers. If, for example, a home attracts 6 offers, then 5 of those potential buyers will be let down.  Obviously, only one buyer will win. And, it's not uncommon for some homes to receive 10-15 offers or more.

Most buyers end up having to write offers on many, many properties before they end up getting a home. Unfortunately, it may take several losing offers in order to "learn the lessons" necessary to compete in this market.

While there's never a guarantee that a buyer's offer will be the "winner," there are a few things buyers and their agents can do to increase their odds of being the offer selected by the seller (who in most cases these days are banks):

1. Be an ALL CASH offer. (yes, I realize this isn't all that easy for most people, but if you can buy with cash, you put the odds in your favor of winning - unless, of course, you write ridiculously low offers thinking cash will always win out... it won't).
2. Get pre-approved by a lender in advance (not just pre-qualified, but pre-approved which means your financial information has been more thoroughly reviewed by a lender).
3. Don't ask the seller to pay for a pest inspection or home warranty. While both of these items should be included when buying a home, the buyers can pay for these themselves.
4. Shorten your inspection time periods.
5. Put down a strong deposit and a large down payment.
6. Be reasonable in your offer price. Your Realtor is your best guide here since every property and every situation is different. Many bank-owned properties these days are already priced well, so by offering well below the list price almost guarantees you either get a counteroffer or get rejected outright.

Of course, always consult your Realtor in regards to all these issues (and others) since no one answer works for everyone.

Many buyers go in to an offer situation thinking they can ask for the world and offer a low price thinking the seller will come back with a counteroffer.  While this is sometimes true, when there are multiple offers, a buyer may get only one chance to get that home they love.

So... consider going in with your highest and best offer from the start. If you lose out, at least you know you gave it your best shot.

More and More Renters Deciding to Buy a Home

With prices on a steady decline for the past few years, more and more renters are finally able to buy a home. When home prices were soaring from 2001 through 2005, many would-be buyers were priced out of the market and were not able to attain the American Dream of home ownership.

With prices hitting record levels during those times, it made much more sense to rent than to buy. Now, with prices back down to levels we haven't seen in many years, the cost of home ownership is back in to strong competition with rents.

For example, look at the various payments (principal and interest) on home purchases with a 6.25% interest rate:

• $100,000 loan: $616/mo.
• $125,000 loan: $770/mo.
• $150,000 loan: $924/mo.
• $200,000 loan: $1,231/mo.

 And, with FHA loans, very popular with first-time home buyers, as little as 3.5% down can get a buyer into their own home.

In addition, let's not forget the tax benefits of home ownership. Mortgage interest and property taxes are deductible, so the net cost of owning a home is even lower. Of course, I always recommend speaking with an accountant or tax advisor when discussing these matters.

So, if you've been considering buying a home, now may be the best time. Feel free to call our office at 916-241-8000 and let's discuss how you may be able to take what you're paying in rent and start putting it into your own home.

California Home Buying Status for June 2009

Here are some interesting facts from the California Association of Realtors (C.A.R.):

• Calif. median home price - June 09: $274,740 (Source: C.A.R.)
• Calif. highest median home price by C.A.R. region June 09: Santa Barbara So. Coast
• $850,000 (Source: C.A.R.)
• Calif. lowest median home price by C.A.R. region June 09: High Desert
• $108,600 (Source: C.A.R.)
• Calif. First-time Buyer Affordability Index - First Quarter 2009: 69 percent (Source: C.A.R.)
• Mortgage rates - week ending 7/30/09 30-yr. fixed: 5.25% Fees/points: 0.7% 15-yr. fixed: 4.69% Fees/points: 0.7% 1-yr. adjustable: 4.80% Fees/points: 0.5% (Source: Freddie Mac)

July 2009: This Month in Real Estate

Foreclosure Flood or a Trickle?

For months now, we've been hearing that another wave (flood) of foreclosures was on the way. We keep hearing it, but it has yet to materialize. With everything going on with the economy and with the banks, nobody seems to be able to answer the question as to when, if at all, the foreclosure flood will come.

What we have been seeing over the past few months has been more of a trickle (drip, drip, drip) of new foreclosures coming on the market. Many believe the banks have a backlog of foreclosures they're "holding" and will release them over the next many months. As to whether it will be a "flood" or a "trickle" still remains to be seen.

As of right now, however, it appears to be a trickle... which is probably better, overall, for home values. If we get a large number of foreclosures hitting the market at the same time, that will create more competition and will put additional downward pressure on property prices.

The trickle we've seen lately, and maybe for months to come, seems to be a more "controlled" release of foreclosure inventory and will create less downward pressure on real estate values. However, the trend could change at any time, so we all need to be prepared.

One thing is for sure is that it is truly a great time to buy real estate. Prices haven't been this low in a long time, there's a lot of available inventory, and interest rates are great.

Stay tuned...

June 2009: This Month in Real Estate

Sacramento County Real Estate Statistics

For those of you out there who love numbers and stats, this blog post is for you. I thought it might be interesting ro provide some current stats on the current real estate market for single-family homes in Sacramento County.

As of today, there are 5,621 homes on the market. 715 of those, 12.7%, are bank owned properties (foreclosures).  And, 3226, 57.3%, of those homes are short sales.

That means that about 30% are "regular" sales. in other words, there are almost 1,700 homes currently on the market for sale that aren't owned by banks and don't require "lender approval" (for short sales).

As for homes that have sold, we had 1,630 sell in Sacramento County in April of this year. We had 1,514 sell in April of 2008 and 891 sell in April of 2007.  So, April's sales in 2009 we're almost double what they were just two years ago. The buyers are back.

As for home prices, the median price in Sacramento County in April was $165,000.  In April of 2008, it was $235,935, and in April of 2007, it was $350,000.  The median price, by the way, is the price at which half of the homes sold above that price and half sold below that price. It is not an "average."

Source: Sacramento MetrolistMLS. Deemed reliable but not guaranteed.

May 2009: This Month in Real Estate

April 2009: This Month in Real Estate

$8000 Tax Credit for First-Time Buyers

As you may have heard, Congress has recently enacted an $8000 tax credit for qualified first-time home buyers purchasing a principal residence between January 1, 2009 and December 1, 2009.

Unlike the tax credit implemented last year, this new credit does not have to be repaid.

Click here for info:    http://www.federalhousingtaxcredit.com

Other helpful links:    The Tax Credit "At a Glance"
                                Tax Credit Frequently-Asked Questions
                                The Law's Other Provisions
                                Video & Buyer Resources