Sacramento Real Estate Views

Archive for the 'Real Estate Market Commentary' Category

The State of South Placer County Real Estate

2011 – Year In Review

Like Sacramento County, South Placer County real estate lost some value in 2011.  Unlike Sacramento County, it wasn’t as stable a year for values in South Placer County.  The reason for this could be that, with values being much higher in South Placer, South Placer County real estate had/has further to fall.

While the value losses weren’t much, you see a lot of bouncing around from city to city with a few exceptions.  Where there is a lot of bouncing around, a clear direction of value is difficult to ascertain.

We’re seeing that properties aren’t selling for what they are appraising for unless they are highly desirable.  Most every closing I’ve had has been this way.  Properties listed at the appraised value aren’t selling for that price nor are they drawing offers at that price, generally speaking. (there are always exceptions)

Foreclosures

The total amount of foreclosure filings has been relatively consistent throughout the year with a high of 459 Notices of Default filed in August and low of 223 in December with a median monthly foreclosure filing of 322 homes.  Filings of the Notice of Trustee’s Sale has been steadily increasing since September.  The average time to the foreclosure sale once a Notice of Default has been filed in 2011 was 283 days trending down from October to a low in December of 211 days, over double the number of days provided for by California state law.

I expect the time from the Notice of Default to the trustees’ sale to decrease as we progress further into 2012.

Granite Bay Real Estate

Values going down in Granite Bay isn’t really a surprise to me.  Like Folsom, Granite Bay home values have been relatively resilient since the downturn began but as we near the bottom of the market, it appears that the overall trend for home values in Granite Bay real estate is downward.

Since July, values have dropped 11% and that’s with an substantial uptick in values in December.  As of December, the total number of homes for sale is 2.7 months are the current pace of sales.

Lincoln Real Estate

The home values in Lincoln bounced up and down all of 2011 but did trend down.  The high sales price was in $284K in January and a low sales price in October of $216K, an almost 24% decrease in values.

At the current pace of sales in Lincoln real estate, there is about 1.9 months of inventory available for sale and believe it or not, that isn’t the low!  In September, there was about 1.3 months of available homes for sale yet prices are continuing to trend downward.  Historically, this makes no sense but it is what it is.

Loomis Real Estate

Loomis real estate values have bounced around quite a bit but in a good way.  The bouncing around in Loomis can be attributed to one or two higher end properties selling in any given month.  You have a high peak in January then a leveling off for 5 months then a high peak in July and a leveling off for 4 months to a peak again in December.  Aside from those peaks, values were very steady all year long.

Unlike the rest of the region, the current inventory of homes for sale at the current pace of sale is about 7.5 months. (!)  That’s the highest level I’ve seen anywhere in the region.

Rocklin Real Estate

Home values in Rocklin real estate were steady in 2011.  Aside from a bit of jumping around with a low of $265K in March, values have been in a very narrow range from $321K to $279K with an average sales price of $292,580.

The total number of homes available for sale is 1.9 months at the current pace of sales.  This is consistent with most other areas of the Sacramento region.

Roseville Real Estate

Roseville real estate has also been very steady aside from a dip in December of $257K.  Other than that, values were between $291K to $263K with an average of $276,580 for 2011.  This graph includes all zip codes in Roseville.

Just like Rocklin, Roseville has just 1.9 months of available homes for sale at the current pace of sales.

 

Summary

South Placer County, just like the rest of the region, has had a steady year of sales and a steady year of values.  While, the overall trend is downward it is nominal in comparison to the 2007 through 2009 time frame.

Most economists are saying that this could be the year for home values to stabilize aka the bottom of the market.  We’ll see how things fare.  In my opinion, if the bottom of the market is this year it will be either in the first quarter of the  year or the 4th quarter of the  year.  My impression is if the bottom of the market is this year, it will be in the first quarter but that’s just my feel of it.

If you’re looking for a home to purchase or sell, please call, text, email or simply fill out the form below and I’ll get back to you promptly.

Thanks for visiting!

Contact me

1. Your Name(required)
2. Email (email required)
3. Phone(required)

 

cforms contact form by delicious:days

Your email:

 

 

 

Tags: granite bay real estate, loomis real estate, rocklin real estate, roseville real estate

The State of Sacramento Real Estate

2011 Year In Review – Sacramento County

I thought it would be a worthwhile exercise to pull up some statistical information and see how values as well as sales fared in 2011.  Generally speaking, we see a lot of national news on values but that is a composite number of all regions and doesn’t apply anywhere specifically.

While that may sound obvious, many people hang their hat on these numbers when in reality they’re meaningless and at best irrelevant.  Because real estate values tend to be hyper local, the only relevant information resides with local industry professionals.

All of the information below has been pulled directly from the Metrolist multiple listing service that serves the entire Sacramento region and covers single family homes only. (Thank you to Metrolist, Inc. for all of the fancy graphs)

Summary

Overall, most of the data shows that the bulk of the Sacramento region has lost anywhere from 2% to 8% of it’s value roughly speaking.  While that may or may not be 100% correct, what I think is most striking is the “leveling” off of prices region wide with a few exceptions.

Depending on the month, values were up and down all year long.  As the graphs will show, one month values were up and the next a little higher then a little down the month after that.

How the multiple listing service figures the percentage of decline or advance is by comparing the beginning month to the ending month in any report inquiry.  If the month in the beginning of the report was an up and the month in the end was down, this will give an over estimation of a decline in value with little compensation to what happened in between these two points.

I don’t believe this to be an entirely accurate view of the market so I’ve included all the graphs for each area in this summary of 2011 home values.

Citrus Heights Home Sales – Both Zip Codes

The average sales price bounced around from a high of $169K in January of 2011 to a low of $147K in April and July.  The yearly average was $156K.  Not a lot of variance in prices here.

Fair Oaks Home Sales

Fair Oaks home values bounced around a little more than other communities in our region.  The high for the year was in January at $303K and the low in September at $223K.  There was a substantial dip in values started in May at $269K and gradually slid down to $223K in September.  The average sales price last year as a whole was $253K.

Folsom Home Sales

The Folsom market has been very resilient throughout the region’s housing downturn.  The trend in Folsom all year was consistently down but largely level.  The high mark was in April at $409K and the low coming in August at $361K.  The average sale price in Folsom was $388K.

 

North Natomas Home Sales

The North Natomas market is one that has bounced around a lot over the last 13 months.  The high at $242K in January and the low in September at $203K.  Like a lot of areas of the region, since September/October 2011, values have been on the rise.  The average sales price in 2011 was $219K.

Orangevale Home Sales

The home values in Orangevale have also trended down with a precipitous fall from July to November of almost 20%.  The average sales price in Orangevale for 2011 was $203K.

Sacramento Home Sales

Sacramento, was largely unchanged throughout 2011.  Besides a blip July and August, values were very stable all year long.  In fact, the average sales price in January 2011 was the same as the average sales price in January 2009.  Not surprisingly, the average sales price over the entire year was $166K.  Very level home values without much in declines.

Availability of Homes For Sale

All of 2011 was plagued by an ever dwindling amount of available homes for sale in the Sacramento real estate market.  As the graph indicates, from January and February forward, the total amount of homes for sale decreased significantly.  Sales have been consistent but not barn burning so it’s not that the pace of sales has increased beyond the point where the homes coming on the market can’t keep up.

Since the fall of 2008, there have been rumors that there will be a flood of foreclosures coming on the market at anytime..BE READY!!  It’s all turned out to be horse hockey.  Move up buyers are largely stuck cause they are underwater and can’t sell to move up.  Those who do sell short have to wait until their credit clears up before than can make a move.  These issues combined have greatly reduced the total number of homes for sale in the region.

 

Please keep in mind that every neighborhood is different within each zip code in the region.  What might hold true for one area may not for the next.  If you have questions about the value of your home in your neighborhood, please let me know.  I’ll be happy to calculate the value of your home and present it to you in a report format.

Simply call, text, email or fill out the form below and I’ll get back to you promptly.

Thanks for visiting!

Contact me

1. Your Name(required)
2. Email (email required)
3. Phone(required)

 

cforms contact form by delicious:days

Your email:

 

 

Tags: homes for sale sacramento, sacramento real estate

Is It Time To Buy A Home?

In The Sacramento Real Estate Market

First, the disclaimer…

Realtors have a universally accepted bad rap among the general public as being sleazeballs with regard to market information willing to tell you whatever they think will influence you to buy or sell just to make a buck.  I agree that there are those types of Realtors out there..I know a few.  I don’t hang out with them but I do know them.

I have, over my almost 10 years of full time service in this industry, tried my very best to present all market information to both buyers and sellers as objectively as I can then letting the individual make the best decision for them.  I feel my job is more about counseling than it is about sales.  I don’t just tell you the numbers, I show you the numbers and information from third party sources.

I don’t approach my job as a salesperson per se.  Perhaps that’s why I don’t sell more homes but at least I can sleep at night knowing that I have acted in the honorable manner to the best of my ability.  I have never been sued.

If I don’t think selling or buying a particular home is a sound idea, I will tell you.  It’s the only way I can do this.

Is It Time To Buy A Home In The Sacramento Real Estate Market?

With that out of the way, I get the question “is it a good time to buy a home?” all the time from buyers looking to make the best decision possible. 

My answer to that question is always the same.  What are your goals?

Whether or not it’s a good time to buy a home is based on many things not only on market factors.  There are other considerations most of which have more to do with your goals than the market itself.

Other considerations could be…

1) If you’re financing, what are interest rates and what direction are they trending?

2)  Whether you’re buying a home to live in or a home as an investment, how long are you planning to live in or keep this property?

3)  If you’re purchasing a personal residence, is it cheaper to buy or to rent?

4)  What is the direction of the market at the moment?  Is it depreciating or appreciating and to what degree?

5)  Is your income sustainable over the long term?

6)  What area would you prefer to live in?

Obviously there are many more considerations you could add to this list.  My point is that the decision to purchase has to be made on more than just the state of the current real estate market.  Recent history notwithstanding, it is uncommon that real estate cycles are as dramatic as they have been.

A Major Consideration Especially Now

In my opinion, a major buying consideration is the direction of the market over the last year and what is the consensus of the pundits going forward?

I just pulled this information from the Metrolist Services, Inc., on the Sacramento county real estate market, which illustrates what the market has done since 2001.  What this graph shows is a pattern that is somewhat consistent with other crashes past markets.

From 2001, there was about a 4 year run up in prices to a 4 to 5 quarter plateau then a near straight down 2 year decline followed by somewhat stable activity.

What stands out to me about this graph is the period of stable activity.  The slight increases in the average sales price in the last 2 quarters of 2009 and the first 2 quarters of 2010 coincide with government incentives to purchase for first time home buyers.

Below is another graph that focuses on the last 5 years specifically.  Again, the level of price stability since January of 2009 to September of 2011 is surprising.  The median sales price in January of 2009 was $165,000 and the median sales price in September of 2011 was $165,000.  No change in the median over a 2 year 9 month period.

There have been, and there will always be, fluctuations in the real estate market as you can see by the graph but the end result is that since the end of the steep cycle of decline, the median home price in the Sacramento real estate market has been stable with the last 7 months varying between $164,000 to $166,000 in the median sales price for Sacramento county!

Please remember these are the MEDIAN sales prices not the average sales prices.  The median home price reflects as many homes sold above this number as below and the average is total number of homes sold divided by the total price of all homes sold.

Average sales prices will always be higher but yet they still demonstrate the same stability wavering between $185,000 and $190,000 over the last 7 months.

Although there have been fluctuations due to government incentives and seasonal buying, I’m encouraged by the performance in sales prices over the last 2 years 9 months.

Yahoo! came out with an article saying that the market would hit bottom sometime in 2012.  Although “past performance is no guarantee of future results” I would have to say that, based on interest rates and IF the bottom of the market is reached let’s just say in March of 2012, if you’re goals include long term retention of your purchase, I would have to say that it is a good time to buy.

If the market does hit bottom in 2012, in March would be a good guess for the month, the last 2 years and 9 months shows that if the market does decline further, it probably won’t be enough to sway a buying decision.

I feel confident at this point to recommend that the Sacramento real estate market is a “buy”.

Looking to buy a home in the Sacramento real estate market?  If you’ve thought about it, it might be a good time to move forward.  If you have any questions about the market or if I can help you find a home either for a primary residence or investment, please either call, text, email or simply fill out the form below and I’ll get back to you promptly.

Thanks for visiting!

Contact me

1. Your Name(required)
2. Email (email required)
3. Phone(required)

 

cforms contact form by delicious:days

Your email:

 

 

 

Tags: sacramento county home sales

“The Negotiator Said We’d Have The Letter This Week…”

And Other Real Estate Market Nonsense!

I was thinking about what to write and decided that what I have going on in my transactions right now is post-worthy…some of this stuff is simply amazing, boring, frustrating and stressful all at the same time.  Well maybe not amazing!

The market for Realtors right now is about as hard as it can be.  While I know it’s the choice of everyone in it to be here, and I think making that choice makes it harder still, it could be easier.

Having banks involved in over 62% of all real estate transactions is the real challenge.  Anytime you add more fuel to a fire, it burns hotter.  Seems every transaction has unique challenges never seen by anyone.

In one way, this is the great thing about this business.  Every transaction is different.  Largely, they are the same but small nuances pop up to challenge you and force you to figure out ways to get things done.

I’m very proud to say that over the course of my career, I’ve had a 95% close ratio on both listings and sales.  In this market, where many decisions are made by someone who could care less about anyone involved, that’s pretty darn good.

The following are just some of the challenges I’ve run into lately.

“But We Didn’t Charge $13.73 At 7-11!”

I’ve been working with these folks for 14 months.  I absolutely love them and their family who I have sold homes to over the past year and a half.  Mom and dad are moving down from Redding for several reasons.  Family and work being primary.

We searched and searched for a home for them without much success.  They had specific needs and we needed to meet them.  We finally found them a home that would work in Lincoln, put in an offer, got it accepted and then we began “the wait”.

“The wait” is the short sale dance that we do.  It’s kind of like a bad Irish Jig and the Cossacks dance rolled into one.  Ick!

Getting the approval on this short sale took about 90 days.  While that isn’t unusual, once you have the approval the bank wants it closed right now.  On top of that, it’s a HAFA deal which means there is another party involved that wouldn’t normally be involved, the U.S. government.

The lender pulled their credit report for the pre-approval and they had 820 credit scores…just wrap that up in a pretty little bow and call it good!

We finally got the approval letter from the bank then got all the disclosures and inspections done.  The lender was ready to submit the loan packet to underwriting for final approval.

One glitch….the borrower had disputed a single charge on one of their credit cards in July.  A $13 charge that wasn’t theirs.  Instead of just wiping out the charge and calling it good, the credit card company put the entire account into dispute.

The entire account!  FHA guidelines say that you cannot have any accounts in dispute as accounts in dispute don’t get added into your credit score.  This means that you could have an account that drags your score down, put it in dispute and your score will automatically go up.  While that wasn’t the case here, it has happened that people do this to get raise their score to get a loan.

We’re a week from closing.  NOT SO FAST YOUNG MAN!!  Luckily, I have an awesome lender who got it straightened out in 5 days and now were very close to closing.

What’s the lesson??  If you’re in the middle of buying a home and you do ANYTHING with your credit, and you should be doing NOTHING with your credit, make sure to let your lender and your Realtor know about it.  In this case, no one had any prior knowledge that this would happen and it couldn’t be helped by the buyer, the lender or me.

“The Negotiator Says We’ll Have The Approval Letter This Week!”

I’ve got an old friend I’m helping purchase another rental for his empire over in Antelope.  This guy is awesome.  We’ve known of each other from mutual friends for quite a few years and over the last 8 months we’ve been looking around for another rental property for him.

We finally settled on a short sale in Antelope.  The agent is a nice guy and keeps in contact with me regularly unlike most agents these days.

On June 22, he contacted me saying that the buyer he had fell out of escrow and the if my buyer was interested it was his.  I said great, we went and looked at it, my buyer said it was perfect and we entered into an agreement.

With the previous buyer, the bank had already approved the sale and the listing agent was able to get the bank to just substitute the old offer for ours.  My thought was that we’d be well on our way to closing this relatively speaking.  HA! Surprise!!  Not so much!

On June 24th, he sent me an email that says he’s submitting the paperwork for the substitution and that he wanted to make sure my buyer was in cause this was going to go “quickly”.  I said send it and lets get this done.

On June 27th, they needed some information from us and we got it to them that day.  Still waiting but escrow is open!!

Still waiting…

On August 1st…yes August…I get an email from him saying that the bank has reevaluated and they need a slightly higher purchase price based on their appraisal.  My buyer said that was within his boundaries and we recreated the agreement.

Still waiting…

On August 1st, he said that the counter and agreement redeux had been accepted by the bank.  We should have the approval letter “very shortly”.  He was “pushing hard” for it.

Still waiting…

On August 11, he calls the manager of the department and complains the process should be done by now.  Still “pushing hard”!!  That same day, I got an email saying email had “worked” and management is now involved.  Should have the approval letter quickly now.

Still waiting…

On August 12, he gets an email saying the bank needs to do another appraisal and that the negotiator who had been working the file has been fired.

Chinese Fire Drill time!!

On August 18th, great news!  The appraisal came in at value!  So what!! Where is the freakin’ approval!!  Wasn’t this supposed to be a “pre approved” short sale??!!

Fast forward…cause I’m getting bored, AGAIN…we still don’t have the approval letter on September 9th.  The new negotiator had a death in the family, the earth is rotating differently and a butterfly flapped it’s wings in Mongolia somewhere blah, blah, blah.

Now the listing agent rarely communicates with me in a timely manner and I keep sending the same message to my client… ”hey buddy, I just wanted to update you and let you know I HAVE NO UPDATE!!!”

Just makes me want to put a gun to my head and…well I’m not that desperate.  Maybe I’ll just buy an ice cream stand and make kids smile.  Right now that seems like such a good idea!!

Federal Politicians Still Don’t Get It

In the “oh by the way” department, my parting comment on this post is that the speech made last night by our President suggesting that refinancing  every Freddie and Fannie underwater loan to the current interest rate of around 4% would actually make a difference is totally wrong.

This screws the middle class by saddling them with debt for the next 10 years or more and totally favors the banks by making sure they get their full principals on the underwater mortgages.

The only solution to the housing market is a principal loan amount reduction down to market value.  While it isn’t the best solution, it’s the only one that will make people feel like they have more money.  When people feel that way they spend more.  More pizza, more soda, more cars, more big screens, more entertainment, all the things that make us go.

That said, it favors the people rather than big business and that policy never works with politicians.

If they don’t do this my advice is this – underwater mortgage = walk away and start over.  You’ll be better off in the long run.  While this may not be the best advice for everyone or something you want to hear, it’s the truth.

That’s my take..what’s yours??

Thanks for visiting!

 

Your email:

 

Tags: short sales sacramento rocklin roseville

We’re Going To Lose 20% More Home Value?

Really?

Lately, a very well respected housing/market analyst, A. Gary Shilling, has come out saying that housing will drive the country into a second recession in 2012 and that housing will lose another 20% in value or more.  Click here.

The premise of his prediction is the current inventory levels of homes for sale is so high and demand is so low that it will be 4 to 5 years before all of the inventory available for sale is absorbed by buyers.

“Over supply is the enemy of values” Mr. Shilling has cited and I agree with him wholeheartedly.

Is that what is going to happen in the Sacramento region?  Will there be another drop in values of 20% or more?  I can’t answer that question and honestly, neither can A. Gary Shilling although I believe his logic to be very sound.

What about the Sacramento real estate market?  Do we have an oversupply of homes on the market right now?  Is it coming and if so, from where?

Homes For Sale In The Sacramento and Placer County Real Estate Markets

Currently, Sacramento county has about 2.7 months of inventory available for sale and that has been trending downward since a high of 4.3 months at the beginning of the year.

While I don’t believe this is relevant industry wide right now, a “balanced” market inventory level, favoring neither buyers or sellers, is said to be 6 months worth of homes for sale.  Sacramento county hasn’t had 6 months of inventory on the market since April/May of 2008 which would signify a shortage of homes available for sale, aka a seller’s market, yet….prices have gone down.  In a seller’s market where the selection of homes to purchase is low and buyer demand is high drives prices upward.

The Sacramento county real estate market has averaged 3.02 months of inventory for sale over the last 3 years.  This is not a glut of homes for sale or an oversupply of homes for sale according to what has commonly been accepted by the industry.

As the above graph and table indicate, over the last 10 months, the total  number of homes for sale has declined, not increased, 22.5%.  In Placer county the numbers are very similar.

In both Placer and Sacramento counties, the picture is the same.  Inventory is down to under 3 months of inventory, pending sales have risen and sales have been very steady.

So what about the rest of the country?  If there are so many housing units available for sale, where are they?  Fortunately, I have many Realtor friends throughout the nation and I took advantage of those connections to get a feel for what everyone else is seeing throughout.

Over the last week, I called or emailed agents in 12 different market across the country.  Here’s what I found out:

Jonathan Bunn, TheRealEstateBakery.com, Washington DC – Jonathan has been around and reporting on the DC market from his blog for at least 3 years.  He said that the DC market is an anomaly compared to the rest of the nation right now.  They do not have an over supply issue currently.

Scott Saghirian, TopTechAgent.com, Maryland – Scott told me in an email that areas outside the “hub” do have an oversupply of homes but that the DC area is in better shape than many other markets across the country without a large supply of foreclosures or short sales.

Chad Lariscy, North Georgia Mountains, TheFrontPorchView.com -  Chad told me that “Market is crazy. Foreclosures are still dominating, about 64% of all sales. Land and Vacant Lot has seen about 70% depreciation. As far as inventory, we are hurting for the good stuff to sell. The good ones are gone quickly!”

Chad’s market is a second home market primarily.  Most of his buyers come from the Atlanta area and anyone looking for property in the Blue Ridge Mountains.

Thomas Ferent, MrLakeFront.net, Maine  – Tom’s market is a second home market as well.  Tom said, “Yes, too much supply and not enough demand is driving prices lower.”

Leigh Fortuna, MiamiSelectRealEstate.com, Miami, Florida – The Miami market is a market unto it’s own.  They have a very high percentage of foreign investors and home buyers coming into there market.   Leigh says that the Miami market is not oversupplied at all.

She believes, as I’m beginning to about the Sacramento real estate market, that Nevada, California, Florida and Arizona will be coming out of this earlier than the rest of the country as these states ran up very quickly while other states did not.   Therefore, if there is another 20% to lose, it won’t be in the states that were affected earlier into the downturn but will be the states that felt the downturn in 2008 or 2009 or later.

TJ Harris, FountainhillsUpClose.com, Phoenix, Arizona – TJ spoke with me at length about her market and what she is seeing.  She said  they have low inventory and multiple offers on anything that is a quality listing.  She said the rental market is going gangbusters right now and also that foreclosure filings are down as well as short sales being able to get done much quicker than in the past few years.

Kari Lundin, DuplexChick.com, Minneapolis, Minnesota – Kari told me that this week alone, her market is down 16.1% in new listings coming onto the market.  She believes though that there is a window of opportunity for sellers in her market and that the low supply issues could be short lived.

Paul Reddam, Homesville.com, Austin, Texas – Paul says that in his market, he has yet to work with a foreclosure or a short sale.  I envy him as that seems to be all I deal with.  He says his market is not oversupplied in the least and that sales are brisk.  He sees prices rising in the Austin area.

When the Sacramento region market was riding high in 2005, 2006 and 2007, the Austin market was tanking.   Now we’re tanking and the Austin market is moving along nicely.

Ro Troia, BlogTheRocklies.com, Boulder/Denver market – Ro told me that the high end properties are moving better than they were last year and that they have no oversupply of homes for sale in fact they are bordering not having much to sell.  She mentioned condos are slow and the rate of foreclosures and short sales is declining.  Prices are stable in her market.

Kathy Vaughan, GardenValleyCurrents.com, Garden Valley, Idaho – Kathy emailed me today and said that her market is oversupplied with homes for sale right now.  Sales are up 75% over last year yet inventory is up 50% over last year.

Dr. John McMillen, ClovisExperts.com, Clovis, California – John and I have been friends for some time as we both are active reporters of real estate conditions in our respective markets.  He says that their inventory situation is much like that of the Sacramento region.

From a newsletter John sent me “The number of foreclosures entering the market continues to remain fairly low but steady and from all the sources I follow I have heard that it will continue to do so. We continue to bump along this bottom with a slight uptick in prices due to the multiple offers out there but will probably ease back down again after summer. All the industry experts continually state that we have several more years of this to contend with unless the wild card is played….the High Speed Rail.”

Jack LeVine, VeryVintageVegas.com, Las Vegas, Nevada – Jack is a very busy agent in the vintage home market in Las Vegas and has been for years.  He told me today that in the section of the market he specializes in there is a lack of quality homes to sell.  Las Vegas was and still is the hotbed of foreclosure activity in the nation.

Jack says he doesn’t see how it would be possible for values to decline another 20% when every listing he tracks is selling for more than list and has multiple offers.  As well as Miami, he says there are a lot of foreign investors from Canada and China purchasing in his market currently.   Las Vegas is an investors heaven right now according to Jack.

Is There An Inventory Issue or Isn’t There?

Out of the 12 agents I’ve spoken with, only 2 to 3 said they have an oversupply of homes to sell.  The remaining agents surveyed said that indeed they don’t have enough homes to sell or they are not oversupplied.

There has been rumors that the banks were going to suddenly release a lot of the homes they are currently sitting on to the market.  When you think about it, that would be kind of a dumb thing to do.  The FDIC has already lifted the restrictions on the banks and lenders to allow them to keep non performing assets on their “books” as long as they like.  Dumping homes onto the market would cost them billions in lost home values.

My Take

My feeling is that California, Arizona, Nevada and Florida, being the first into the housing downturn and hit the hardest, will be spared further “free falling” of home values but the other areas of the nation where there are unemployment issues who got into the downturn late and didn’t have a huge run up in home prices will be affected by larger value losses.

I see the Sacramento regional real estate market to continue to decline gradually but I don’t see an enormous drop of 20% or more on our horizon.  6% to 10%? Perhaps but 20% just doesn’t seem possible due to market conditions right now.

As the 8 ball so aptly states…”all signs point to no”.   What do you think?  Will our market lose 20% more or will we just bump along the bottom till a full on recovery?  Chime in!

Looking for an agent to help you buy a home in the Sacramento region?  Please call, email, text or simply fill out the form below and we’ll be in touch with you promptly.

Looking for the value of your Rocklin or Roseville home?  Please go to Rocklin House Values.com or Roseville House Values.com for up to date values of homes in your neighborhood.

Thanks for visiting!

Contact me

1. Your Name(required)
2. Email (email required)
3. Phone(required)

 

cforms contact form by delicious:days

Your email:

 

 

Tags: homes for sale rocklin roseville sacramento

Could The Sacramento Region Lose 20% More In Home Values?

A. Gary Shilling Is Convinced It Will

This information/prediction has been around a while and largely I had ignored it.  Anything that seems too improbable, too far out there I tend to gloss over thinking “that’s nice but doesn’t seem realistic”.

Case/Schiller has come out and said that over the next 3 to 5 years real estate will lose up to 26% more value.  That would put roughly 50% of homeowners nationwide underwater on their mortgages and could cause a mass exodus from homes and that, in turn, could cause another financial system meltdown.

Or maybe not.

A. Gary Shilling, however, is one of the prognosticators who got the downturn right, predicted the sub prime mess as well as not agreeing with most economists last year when the market appeared to be rebounding. (He was correct there too.)

Massive Oversupply Of Homes

The basis of his contention for another 20% drop in home prices hinges on the fact that, currently, there are roughly 4 million homes available for sale when the new and existing working inventories create roughly 2.5 million homes for sale per year.  This leaves an excess of about 1.5 million homes in addition to the “shadow” inventory of 500,000 additional homes to work through a system that is not built for speed, as it were.

This leaves 2 million in excess homes to be sold on top of the 2.5 million that are the normal working inventory in the industry.  A glut of homes available will then drive prices down until the 2 million additional homes are absorbed.

That could take years in a selling environment where mortgage standards have tightened more so than what is needed, an entire segment of buyers is not motivated to purchase and a recovery of home sales just isn’t happening.

By the way, last I checked, we’re not selling 2.5 million homes this year nor did we last year according to the National Association of Realtors.

So What’s This Mean?

The average home that sells in Rocklin is 4 beds, 2.5 baths, 2400 square feet and is selling for around $317,000 currently. In 2006, that same home averaged a sales price of $533,326.

If home values decline 20% more over the next 2 years to the bottom in 2013, where Mr. Shilling says the bottom of the market will be, that would make this same home worth $254,000 in 2013, a 52% decrease in the average sales price in the 95765 zip code of Rocklin.

Considering the state of our local economy where the two biggest employers, the State of California and the housing industry, are severely depressed right now, it seems fathomable that this could occur especially here.

What’s A. Gary Shilling’s advice?  “Sell your house, second home or investment single family houses yesterday, if you plan to do so any time soon…Excess inventories are likely to push down prices another 20%.”

As a parting comment, Mr. Shilling also says that his prediction “may be optimistic because declines tend to overshoot on the downside just as bubbles do on the upside.”

Not good news.

More Information

To find more information on A. Gary Shilling, Google “Gary Shilling sell your home yesterday” for the complete thesis.  Hunt around and see who is quoting him.  I was very surprised and am now beginning to believe this could happen here in Rocklin and the Sacramento region.

Also Yahoo! video, The Daily Ticker, had Mr. Shilling as a guest.  Google “20% drop in housing to cause recession in 2012 Gary Shilling” and it should come up.  Click here for the link.

If you’re underwater on your mortgage, having trouble making your mortgage payments or need to relocate and sell your home, whether you have equity or not, please contact us.  We specialize in short sales with a professional negotiation staff whose sole function is to negotiate with your lender to get your short sale through.  Best of all, our services cost you nothing as our fees are covered by your lender from the proceeds of the sale of your home.

As always, please consult your financial professionals to confirm with them the current ramifications of selling your home for less than you owe.

To contact me, please call, email, text or simply fill out the form below and we’ll get back to you promptly.

Thanks for visiting!

Contact me

1. Your Name(required)
2. Email (email required)
3. Phone(required)

 

cforms contact form by delicious:days

Your email:

 

Tags: short sale sacramento rocklin roseville

Is It A Good Time To Buy A Home?

I Think So..Here’s Why

The Sacramento regional real estate market has been pummeled since 2007.  Foreclosure and short sales have been the buzz words as well as my personal favorite, “submit your highest and best offer”.  Counter offers have virtually vanished from the industry if submitting on a bank owned home.

Lately, however, market indicators are pointing the way toward a housing stabilization.  We are now somewhat free of government intervention and as such, there hasn’t been any incentive (other than historically low interest rates and home prices) to purchase other than the desire to do so.

Understand that a shift must be made in our thinking of what buying a principal residence, your personal home, represents – a place to live not an investment.

There is a distinction between principal residence and investment residence purchases.  The market correction that we have been experiencing since 2007 has put an end, even if temporarily, to the thought that our principal residence is an investment.  Principal residence purchases and an investment residence purchases are done so with differing sets of goals and considerations.

That said, it’s a good time to buy either an investment or principal residence and here’s why:

Interest Rates Are Low

As of July 7th, the average 30 year mortgage interest rate was 4.60% according to FreddieMac.com.  The term average suggests that even lower interests rates are available for a 30 year fixed mortgage.

Home Prices Are Below 10 Year Lows

The average sales price in Sacramento County in June of 2011 is $11K lower than June of 2001.  See the graph below.

This is the case in Placer County as well where the average sales price is $4K below the 10 year average.

In both graphs, you can see that in the last year, the price declines have not been as steep as they were from 2007 to 2009.  Couple that with a luke warming of the economic picture nationwide and this is what the majority of economists saying there are positive signs in housing.  The report is for a slowing in the home value declines to a stabilization in home prices as early as the end of 2011 to 2012.

A slowing of value declines means that your initial investment has a higher probability of remaining intact aka..you won’t lose your down payment to value declines and if you do, it won’t be much.  Reference the rethinking of what a principal residence purchase is mentioned above.

The old adage holds true for the purchasing of anything and that is to “buy low and sell high”.  Right now, we’re in the buy low phase.

Deduction of Mortgage Interest

The deduction of mortgage interest, while it’s still here, is a great incentive to purchase a home.  The write off alone saves thousands of dollars each year in taxes.  Did you know that we are one of the only countries in the world to have this home owning benefit?  Not even Canada allows their home owners to write off their mortgage interest.

Financially, there are pluses and minuses to this but right now, it’s definitely an incentive to purchase.

And Finally…It’s Cheaper To Buy Than Rent

The average home sold in Rocklin since March 1, 2011 was 4 bedrooms, 2.5 baths, 2431 square feet and sold for $316,673.  With a 10% down payment at the prevailing average interest rate of 4.60%, the payment on this home with principal, taxes, interest and PMI would be $1790.93 per month.  With 20% down, the monthly mortgage payment would be $1628.59.

To rent a 4 bedroom, 2.5 bath home in Rocklin, according to Craigslist.org right now, costs $2122.50 per month.  That’s a 10 home average rental cost.  Not to mention you get the mortgage interest deduction saving you thousands more per year in the process.

Averaging the two payments above together, purchasing would cost and average of $1709.76 while the average cost of renting the same home is $2122.50.  Buying a home saves over $400 per month in this scenario in monthly costs in the Rocklin area alone.

There is a lot of doom and gloom in the market news right now and people are afraid to purchase.  What we’ve been through in housing has been dramatic but that’s in the past. Home ownership affords you advantages that renting does not.

All of the above information was pulled from public sources and is verifiable.  If you have just good credit and a smallish down payment, you should definitely consider purchasing a home and soon.

Looking for an agent to purchase a home in the greater Sacramento area?  Please give me a call, email, text or simply fill out the form below and I’ll get back to you promptly.

Looking for the value of your Rocklin or Roseville home?  Go to Rocklin House Values.com or Roseville House Values.com for up to date home values in your neighborhood.

Thanks for visiting!

Contact me

1. Your Name(required)
2. Email (email required)
3. Phone(required)

 

cforms contact form by delicious:days

Your email:

 

 

Tags: buy a home in rocklin roseville sacramento