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Possible Double Dip In Region Home Prices?
Case Schiller Thinks So…Before Spring!
Could it be the case that home prices will dip yet again to new post peak lows?
As hard as it is to believe, it could be true.
In an article from DSNews.com, it looks like if the trend in home price weakness continues, we could see new lows for home prices in the Rocklin and Roseville real estate markets and throughout the rest of the region as well.
I haven’t completed the 2010 sales summaries for all zip codes in the South Placer County area yet but so far, each zip code I have done lost value in 2010. Albeit not much but a loss is a loss.
A double dip in values would be icing on the housing bust cake. What a bust it’s been.
According to Case-Schiller, all but two of the cities surveyed, San Diego and Washington DC, suffered housing value declines in 2010. A double dip would result in even more homes being underwater in our region than there are now, further damaging our local economy.
Economy Stabilizing?
Based on the information from economists nationwide, we’re supposed to be coming into a period of economic stabilization toward the end of this year. Housing prices are supposed to begin bottoming out or at least flattening.
With a double dip in housing prices is this really possible? Doesn’t seem so. In an article today on HousingWire.com, Fiserv is calling for housing value stabilization in late 2012! Wow…let’s just keep putting the date further out there and see how it goes! 
According to Fiserv Chief Economist David Stiff. “Foreclosure activity declined at the end of 2010, but sales activity of bank-owned homes increased. In bubble and crash markets, the uncertain timing and volume of bank liquidated properties will cause home prices to bounce around their lows for many years.”
So our prices will go down more this year and stabilize at their lows for “many years”. Wow! There is a silver lining here though..read on.
The Good News?
There is good news here. If prices are going to go down more than they have, if we see a double dip in housing values, anyone walking way from their home or selling short will be able to purchase again in a few years at prices lower than what they are right now!
Like any news, we have to get many sources and take everything with a grain of salt. However, this isn’t new and to see it actually happening is more than we saw when the housing downturn began.
If you’re thinking of selling your home short or walking away, I would always advise selling short if you can, now is the time to do it. In a few years, based on this information, you could purchase again at below or at least close to the prices for real estate today.
Need more information on selling your home short? Please fill out the form below and we’ll get back to you promptly. We’re short sale experts and can help you get out from underneath your underwater mortgage as quickly as possible.
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Your Lender Doesn’t Want to Modify Your Loan
92% of Loan Modification Attempts Fail
As much sense as modifying your mortgage makes to, well, everyone..your lender doesn’t really want to do it. The answer to why this is the case remains a mystery.
There are so many variables involved and behind the scenes dealing that goes on, no one can really tell for sure what’s going on.
The bare bones facts are that 92% of all loan modifications will fail. 92%!
While your lender will lead you to believe that they are diligently working on an approval, it’s more often the case that they are just telling you that so that you stay in the house longer. This, they have found, insures the condition of the asset.
A lived in home is not open to vandalism and is in better condition as a result making it more marketable when auctioned off.
What If Your Loan Modification Is Approved?
Chances are that if your loan modification is approved, you won’t be saving that much AND your home is still massively underwater making your overall financial condition poor.
We have so much emotional attachment to our homes. We have been trained, or brainwashed, that we want to keep our homes no matter the cost even to our financial detriment.
Keeping a home that is in negative equity is financially detrimental.
No one wants to lose their home, no one. If you’re in trouble, your lender doesn’t want you to keep it unless you’re able to meet the terms of your mortgage with them.
With interest rates as low as they have been for so long, even with a loan modification, how much lower can your interest rate be reduced? Not much and if it is reduced, it will be for a limited amount of time. In 3 or 5 years, you’ll be faced with the same situation – an underwater mortgage and a home with negative equity.
So What’s The Solution??
Making the decision to walk away from your home is a tough one. My family and I did that last year. I still have trouble, in fact I haven’t done it, going back down the street we used to live on. It’s only 2 minutes from where I live now. I knew at the time it was a decision that was best for my family and our financial future.
That said, it wasn’t an easy decision to make but I don’t regret it. We tried to sell it short but they denied that at the last minute and sold it at auction putting us in the precarious position of needing to find a place to live quickly. We were out in 5 days.
I would make the same decision again if I had to.
Everyone has to make the decision that’s best for them. There are many, many things to take into consideration before making the decision to sell short or walk away. It’s clear now that a loan modification just isn’t going to work unless you hire a third party to get it done and even that’s no guarantee. Hiring a 3rd party is expensive and if it doesn’t go through, you’ll be out money that could have been used in a more worthy pursuit.
I spoke with a woman last month who had all but exhausted her entire savings to save her home…and still lost it. It just doesn’t make sense to do that anymore. If she had sold her home short, the result, while still not good, would have been better than foreclosure.
Weigh your options carefully and I can tell you that almost any situation where you no longer have an asset that is in a negative equity position is better than the reverse.
If I can be of any help to you, please feel free to fill out the form below and we’ll get right back to you.
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2010 Roseville Home Sales Recap – 95747
Number Of Homes For Sale Increases 31.9%
The year started fairly well for this area of Roseville as far as real estate was concerned. There were 191 home for sale in the entire zip code and sales were moderate. If I remember correctly, sales were a little slow as the First Time Home Buyer Tax Credit had been extended but late so buying momentum had slowed due to the November 31st expiration.
As the year progressed, the number of homes for sale increased. This peaked in September and has come down a bit as the graph shows but the number of homes for sale in the 95747 zip code of Roseville is still high compared to the beginning of the year.
Sales remained steady through the year but the number of homes for sale continued to climb to a 29.6% increase from January even though the winter months in 2010 were strong sales wise compared to the beginning of the year.
These number don’t reflect all of the available new homes for sale in this zip code and that could drive these numbers higher than what is reported here.
Average Sales Price Declines
The average sales price in this zip code of Roseville declined 5.7% January over December. This was expected by most economists and shouldn’t be a surprise really. I’m thankful it wasn’t higher as it has been in years past.
All indicators point to value losses slowing in the coming year. When will our region begin to appreciate?? That is anyone’s guess. Wish I had a crystal ball on that one, believe me.
Available Homes for Sale in Roseville 95747
We finished the year just about where we started with just a 2.9% increase in the available number of homes for sale in this Roseville zip code. In January, there were 3.5 months of inventory available and in December 3.6 months of inventory so not much change there.
I’d love to see inventory levels come down even more but I don’t think that’s in the cards for now. We’ll see. With so many people out there with underwater mortgages, I don’t think we’ll see much in the way of inventory declines unless sales really pick up. That would be nice too.
While it may not seem like it, the market is getting better by not getting much worse. We can be thankful for that.
If you’re looking to buy or sell a home in Roseville, please consider using our services. We are experts in both departments as well as professional short sale negotiators.
Just fill out the form below and we’ll get back to you promptly.
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Thanks to Metrolist Services Inc and Trendvision for use of these awesome graphs!
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No Further Extensions or Postponements
Wells Fargo Action Sets Precedent
In a move that was expected after Fannie Mae, the largest mortgage investor in the country, announced in March that they would no longer be extending short sale close dates or postpone foreclosure trustee’s sales, it appears that Wells Fargo is now on board with the same policy.
Wells Fargo will no longer extend short sales or postpone foreclosure trustee’s sales for now. I say for now as this could change as many things in this miserable housing market have.
The reason, they are citing, is because investors have asked them not to extend the time frames.
This makes complete sense given that people are staying in their homes and not paying mortgages in excess of a year when deciding that they need to give up their homes, work through the loan modification process or the other myriad of reasons that delay a process that should take about 6 months and 20 days in the state of California.
It appears that investors are done with facilitating loan modifications and are not willing to participate in the government programs that were designed to keep people in their homes. These programs have largely failed anyway so what’s the point?
And This Means….?
What this means to virtually anyone regardless of whether or not you have a loan or are being serviced by Wells Fargo is that the days of staying in a home and not making payments for an extended period of time are over for now.
If you have a hardship situation or are strategically walking away from an underwater mortgage you have to set everything up in advance to make sure you’re not going to be foreclosed upon.
Before you miss a payment, I would advise you meet with your financial professionals to ascertain your best course of action.
Selling short is more often than not the best option to foreclosure as the credit ramifications are not as penal. Get started in advance so that you don’t run the risk of foreclosure.
If Wells Fargo, one of the largest and most organized mortgage servicers in the country is adopting this policy, it will not be long before the investors who utilize the services of other big banks follow suit.
This will speed up the foreclosure process and could potentially increase the number of bank owned homes for sale so it appears on the surface.
I’m holding a Homeowners Workshop that will address all of these issues on October 20th in Rocklin. Click here to register or contact me for more information.
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Rocklin 95765 Home Sales Report
Homes Available for Sale Soars
Over the last year, the available homes for sale in the Rocklin 95765 has gone up, then down and now it’s at the highest point in over a year at 151 homes for sale as of this morning.
While the graph below indicates that in August the number of homes in “pending sale” reached it’s highest point in over a year, a quick check on the number of homes in pending sale has gone down to 60 which still seems to be higher than the average according to the graph.
High inventory, lower pending sale numbers equals value loss. The lower pending sale number reflect a waning demand in the Rocklin real estate market at least for the moment.
Generally at this time of year it could be said that this is seasonal as we head toward the winter sales slowdown, the best time to buy a home. Currently, we have about 4 months of inventory on the market for sale in the Rocklin real estate market.
Average Sales Price vs. Sold Price
The average for list price to sold price percentage is always pretty consistent with most homes selling within 96% of the list price here in Rocklin.
What the graph below shows is that the average list price in Rocklin has come down 22.2% over the last year. This is a sign that seller’s have seen the direction of the market and have adjusted their expectations to meet the value losses that have occurred.
Perception is always behind reality in real estate.
The average sold price for a 4 bedroom, 3 bath home measuring roughly 2350 square feet was $325,000 in September, down 4.2% over the last two months.
That said, the average sales price could pop up again next month. From a high of $390K in April, the average sold price has been trending down.
As the graph shows, although the for sale numbers indicate a wide disparity in the expectations of the sellers to actual sold prices, the sold prices themselves have been bouncing along over the last year, not going significantly higher or lower unless there is a market anomoly.
The sold price has been as high as $390,000 and as low as $303,000 over the last year. This is common in Rocklin due to the fact that in a small area you’ve got some very custom homes and also newer “tract” type homes. While the “tract” type homes are very nice, they aren’t custom homes and sell for less. One sale of $750K throws the average sales price numbers a little out of whack.
If we throw out the low and the high, we’re left with an average sales price of $342,000 over the last year. This is a more accurate number I believe.
Seller’s have been more realistic of late and the pending sale numbers reflect that buyers are responding to that. Now that government intervention isn’t as prevalent, or more appropriate non existent, the market is becoming more balanced.
This is about as normal a market as I’ve ever seen. I think!
If This, Then….
Simply stated…if
1. Inventory is going up
2. Pending sale numbers have gone down
Then…
1. The supply of homes exceeds demand
2. When supply exceeds demand, prices fall as they did in September.
This is simple economics. I learned this in junior high school. Easy right?
It is irresponsible to say what home prices “will” do. All we can say for sure is what they have done and then give an impression of what is possible based on the numbers.
Looking to buy a home in Rocklin? Wondering what the value of your Rocklin home is? Please contact me if I can help you or simply fill out the form below and I’ll respond promptly.
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Data and graph’s supplied by Metrolist, Inc. Our local multiple listing service.
Home Warranty or No Home Warranty?
Are You Feeling Handy? Well Are You, PUNK!
I got an email from a past client of mine who just had a zone controller go out on a dual zone air conditioning system in his home. They just closed in June.
The failure, while a pain, doesn’t keep the cooling system from functioning but just means that the entire house will be cooled when the system is turned on rather than just a specific zone of the home.
At the end of the transaction, I split the home warranty with my buyers as thank you for their business. I have been a proponent of home warranties throughout my career but anymore, I don’t know if purchasing a home warranty is a good idea. At least from the sense of that it’s “always required”.
When the controller failed, they called the home warranty company and told them they had an issue with their a/c and could someone come out to fix it.
When the guy got there, which cost them a $55 service call, he told them the part wasn’t covered and that it would cost them $600 to replace. The part wasn’t covered? Why did we bother getting the central heat and a/c covered at all? What does it cover, duct work?
What home warranty companies seem to do is cover items that have the lowest possibility of failing. Sound familiar? Sounds like most insurance companies.
The fact is that they really don’t want to pay if something goes wrong with your home. They don’t. Home insurance companies are no different. Submit a claim and see your rates go through the roof.
I called a friend of mine who works on a/c and heating systems. Paul Burke is his name is he’s the best I’ve ever run into. Great work for the best prices. He quoted me a price of $385 installed to have the system. That’s a $270 savings and he wouldn’t have charged for the “service call” if he did the work.
So…Warranty, No Warranty?
I can’t ethically advise anyone against a home warranty. I will say this, going forward, I will educate my clients about home warranties, what they cover and whether or not it makes sense for that client.
I had a home warranty when I purchased my home. I never used it as I tend to fix things myself. I didn’t have any problems with what they covered so I never had a reason to call them.
This is just what First American Home Warranty Buyers Protection Corporation was hoping would happen with my buyers.
If you’re purchasing an older home where the components haven’t been updated then I think a home warranty could be a good thing. If you’re buying a home that is less than 10 years old or a home where it’s clear there has been no deferred maintenance, then it’s probably safe to pass on a 1 year home warranty WITH a comprehensive home inspection of all components.
Get a very comprehensive home inspection. This is something I always recommend. A comprehensive home inspection is, in my opinion, the most important thing you can do when buying a home.
Have all the components of the home tested by a general contractor/home inspector, a heating and a/c contractor, a pool/spa guy, if that applies, and then review the reports.
If you feel confident in the fact that all components are in good working order, I think, if it were me, I wouldn’t buy a home warranty on a home that was less than 10 years old. Many homes in the Rocklin/Roseville real estate markets fit this description.
Please understand that this is what I’d do for me and not a recommendation that I’d give anyone else. I’ve seen too many of my clients experience difficulty with home warranties.
If you are considering purchasing a home warranty, don’t treat it as a mandatory requirement and be absolutely clear on what they cover and what they don’t cover. If you’re working with me, I’ll go over EXACTLY what they cover and what they don’t.
Looking for someone to help you with a home purchase? Simply fill out the form below and I’ll get back to you promptly.
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Buyers On The Sidelines…Again
Number of Single Family Homes for Sale Continues to Rise
With the threat of a double dip housing recession and no incentive for first time home buyers to purchase, the Sacramento real estate market is losing, or has lost, steam.
I know it sounds like a broken record but every month this year the number of homes for sale has gone up.
The threat of a double dip housing recession in the Sacramento region with the typical slowdown point of the “buying season” approaching is very daunting.
Depending on what the banks do, there could be more and more homes coming on the market without buyers to purchase them as investors wisely wait for the fallout yet again.
Where does our market go from here? From the looks of it right now, not in the preferred direction.
Simple economics dictate that when supply goes up, values go down. As you can see from the graph, supply is going up and has gone up every month this year.
Status Of Homes For Sale Remains Consistent
The status’ of the homes on the market has remained consistent since the beginning of the year, percentage wise. Looking at the 
fact that the notices of default keep on coming, albeit at 47% less than last year, it seems as if the foreclosures inventories should be increasing but they aren’t.
The reason for this is that many homeowners are working with their lenders to get loan modifications and some are going the short sale route.
Still, foreclosure sale after foreclosure sale is being postponed. In fact, 29% more postponements than the same time last year and 16% more postponements than last month.
I’ve heard that recovery really isn’t in the cards for our region economically until 2014.
I hope that’s wrong. What we need right now is a huge bright spot something to get a smile on the face of the region. A few more jobs would help.
I’m smiling anyway..regardless of what’s going on.
Looking to buy or sell in the Sacramento region? Give us a call or simply fill out the form below and we’ll get back to you promptly.
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