We've Moved!

Check out our new blog located at http://cbsactahoemarketwatch.wordpress.com/.

Tax Credit and a Seasonal Market Adjustment as We Prepare for 2010

It is nice to know that our long wait is over and we now know the results of the tax credit. The very fortunate news is that the government addressed two key markets as part of its extension and expansion efforts:

1. A $6,500 tax credit for existing homeowners who are in the market for a new home.
2. An extension of the $8,000 tax credit for first-time home buyers.

The extended deadline requires that consumers go into contract by April 30, 2010 and close by June 30, 2010.

Under the new requirements, an estimated 2 million Americans are expected to claim the tax benefit. The IRS estimates 1.4 million people have already claimed earlier versions of the first-time home buyer credit.

What I can tell you about the tax credit is that it was the single most important factor in improving our market. And we didn’t really fully realize the benefits it was making on our market until we saw a sudden surge in units closed and increased showings in September, October and November as consumers grew closer to the deadline. Once the deadline was extended, we saw an immediate adjustment, which shows just what an impact it has had on our market.

Also in recent news, NAR released its monthly pending home sales report which showed that sales have risen for nine months in a row, a first for the series of the index since its inception in 2001. A forward looking indicator based on contracts signed in October, the report showed a 3.7 percent to 114.1 from 110.0 in September and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.

Of course it is important to point that the housing market has been underperforming for most of the past year so I would caution not to get too excited about these numbers. But the positive news is that it does show that the tax credit is working.

Now that we’re in the thrust of the holidays, I fully anticipate a seasonal market adjustment. But we also recognize that the New Year is just a few weeks ago and, if history is an indicator, we will see a large number of listings coming on the market during that time. Many of our Agents are working hard now to prepare their listings for the market in the New Year so the coming month should bring some positive new inventory to the marketplace.

Now, let’s take a look at this week in real estate:

AUBURN:
Listing inventory in the Auburn area remains low as does the sales inventory. Projections for the remainder of the year are limited, especially since we are used to seeing many bank owned properties- the lenders are unlikely to release many until after the first of the year.
Activity was higher for Ratified offers, and we saw only four multiple offers. Open home activity was also low, mostly due to the holiday period. The good news is that buyers are not only serious, but qualified as well.

The floor calls seem to be a good source for some of our most recent sales. It is quiet in the foothills and the agents that are working with buyers are still writing multiple offers and not getting an accepted contract. We have had a few more short sales approved and closed

DIXON:
Here’s some great news: both listing and sales inventory here is increasing- even though they are short sale transactions, we are happy that there is inventory to sell! Additionally, all listings are getting multiple offers! We didn’t have any open homes this past period due to the holiday weekend. A lot of buyer activity but low inventory in Dixon slows us down- looking forward to seeing more inventory after the 1st of the year.

FAIR OAKS:
The inventory is still down for the past two weeks. On the positive side, bank owned homes are selling as soon as they come in and we are seeing more traditional sales. Sales inventory is also slower the past two weeks. The agents are thinking it is because of the non-release of REOs, and nearly all of the offers are in multiple offer situations.

Numbers for ratified offers are up this month. The agents working with the buyers are finally getting accepted. A few of my listing agents have short sales going on and a few REO listings are selling immediately. The key is the pricing for our listing teams…

Open Houses have been a little slower this past two weeks. The weather was slightly warmer and not as many buyers were out there this week we are scheduled for approximately 8 to 13 scheduled Open Houses.

The Short Sales have really taken off and this is where the market is headed for. Also real sellers are considering selling. You must remember people sell and buy in any type of market. Transfer moving up buyers with larger families down sizing etc.

Buyers are still out there looking but with low inventory and multiple offers, it is highly completive. That doesn’t even calculate appraisal issues!

FOLSOM:
Inventory is on the up-tick- steady with 12 new listings and slightly increasing sales inventory. We had 21 ratified offers- with half being traditional sales!

We have to echo the rest of the offices with Open Home activity being slow due to the holiday period and good weather.

Although we don’t have any activity on our listings over $750,000 several agents are working with buyers in this price range.

The agents that are still working thru the holidays are being rewarded and the business is spread out to many agents. We had 21 new sales turned in by 15 different agents, 12 new listings turned in by 12 different agents and 20 recordings with 13 different agents. So …32 of the Folsom agents had at least one piece of business this past 2 week period. Not bad!

ROSEVILLE- GRANITE BAY:
While listing inventory is steady, the sales are decreasing. We are seeing multiple offers on a regular basis with several on short sales. Active short sales are dominating market at this time—hopefully we will see much more inventory after the first of the year!

ROCKLIN- LINCOLN:
Listing inventory is slow! As for sales, the homes that are priced under $250,000 are sold quickly with multiple offers- one property receiving 23 offers! We had 14 open homes but with light traffic.

We have several short sales approved and closed. We have just ended an escrow with a “buyer” that appeared to have given us some incorrect information that just seems to solidify the fact that we have some creative buyers and others that may be trying to structure a transaction that might be fraudulent. As such, we are being very careful to ask better questions and make sure the disclosures are handled properly and communications verified. There seems to be more activity in the direction of Beal Air Force Base.

A couple of our agents invited an airman stationed at Beal to join them for Thanksgiving. The airman, from Georgia, was new to the area and had no family or friends close by and they wanted to make sure he had a special Thanksgiving. They planned some activities for that day, however, since he did not have a TV he was more than happy to watch football all day!!!

TAHOE- TRUCKEE AREA:
Active Listings: The active listing inventory for the Tahoe-Truckee dropped 5% from last week. Currently there are 1,784 active listings - 1,195 residential properties and 589 lots and land listed for sale.

Active Listings - REO’s and Short Sales: Of the active listings, there are 171 properties listed as short sales, (9.6%) and 69 properties listed as REO sales, (3.9%). While less than 13% of the active listings are short sales and REO’s, roughly 24% of the properties selling are short sales and REO’s.

Months of Inventory: Based on the current inventory and sales for the previous 30-day period, the market has roughly 13-months of inventory available. The inventory of homes and land at today’s prices bodes extremely well for buyers interested in entering or moving up in the Tahoe-Truckee market.

Sales Summary:

Total Sales Year-to-Date 2009 Vs 2008:
On a year to date (YTD) basis there have been 978 properties sold in the market as compared to 955 for the same period in 2008. The last half of the year has seen a dramatic turnaround in sales from the first half of the year.

For properties sold YTD 2009, 151 were REO’s, (15.4%), and 80 were Short Sales, (8.2%) which results in almost 24.0% of the properties sold being a short sales or REO.

For 2009, there have been 564 properties sold priced below $500,000, 310 properties sold between $500,000 and $1,000,000 and 104 properties sold over $1,000,000.

Median and Average Sales Prices 2009 Vs 2008: The median sales price for properties sold YTD in 2009 is $450,000 while the average sale price is $590,028. For the same period in 2008, the median sales price was $501,500 and the average sales price was $720,146 which is an (10.3%) and (18.1%) reduction in price respectively for one year.

Last Week’s Sales: For the week of November 23rd to November 29th sales decreased substantially from the previous week to 18 sales mostly we suspect because of the Thanksgiving holiday. Of the properties sold last week, six (6) of those sold at a price above $750,000. In fact, one property sold was a Lakefront at $3,150,000 and the other large sale was $2,165,000. While homes under $600,000 are selling more rapidly than most, the large sales that occurred last week still point to the fact that homes priced right are being purchased by savvy buyers.

Pending Sales: Pending sales remained constant at 169 properties.

Market Activity Summary:

With December and the winter months approaching we remain encouraged that buyer interest in our market will remain good as our inventory is plentiful and sales prices are at 2003-2004 levels. Homes priced below $600,000 are where the most sales activity is occurring with multiple offers are commonplace. The upper end of the market is moving a bit slower but homes priced well are definitely in demand. Coldwell Banker currently has over 40 homes in escrow scheduled to close in the next 30-60 days.

Tahoe-Truckee Homes Prices are at 2003-04 Levels…


This week I’ll leave you with a few good articles of note:

• Whither Real Estate's Comeback; Forbes
• Mortgage Applications Increase In Latest MBA Weekly Survey; Mortgage Bankers Association
• Home Sales Contracts Soar In October; CNN Money
• Credit Helps To Lift U.S. Home Sales; NY Times

Until next week,
Make it a great one,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento

Exciting New Opportunities for Existing Homeowners and First Time Home Buyers!

I have some good news to share with you. The U.S. House of Representatives voted by an overwhelming 403-12 margin to approve the Unemployment Compensation Extension Act (H.R. 3548) that included, as an amendment, the extension and expansion of the Homebuyer Tax Credit. The bill already passed in the U.S. Senate yesterday by a vote of 98-0, so now it will advance from Congress to the White House for President Obama’s signature. It is one step away from being signed into law, and the Administration already has signaled its support of the Homebuyer Tax Credit amendment as well as the President’s intention to sign the bill.

This is an historic moment for our industry as well as the culmination of more than a year’s worth of hard work and meetings with elected officials and policy makers on the part of Realogy management. I am both proud and appreciative of how so many of our employees, franchisees and sales associates participated in various grass roots outreach efforts with Congress. Our Company’s efforts on Capitol Hill truly helped make a difference on this issue.

Again, this bill is now one step away from becoming law. Our voices were heard in Washington, D.C., and we should be proud that our government is taking strong action to help our industry and the economy. Having an extended and expanded Homebuyer Tax Credit available to qualified homebuyers through the first half of 2010 undoubtedly will benefit our business and the U.S. economy.

The new bill calls for an incentive for buyers who have owned their current homes at least five years, making them eligible for tax credits of up to $6,500. First time homebuyers – or anyone who hasn’t owned a home in the last three years – would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010 and close by June 30.

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

As an industry, we are certainly pleased that the tax credit may be extended and expanded. The key to returning stability to the economy lies within the housing market, and we have crafted a meaningful credit that will create a strong foundation for future growth and make a measurable difference over the next seven months in our economy.

Furthermore, tax credits like this only work by creating the sense of urgency to take advantage of them. This is said to be the last extension of the home buyer tax credit and I urge people – whether they’re first time home buyers who’ve always dreamed of having a home of their own or someone who has been gridlocked in the challenges of our move-up market to take advantage of this opportunity.

In other real estate news, NAR released its pending home sales report this week which showed that pending home sales rose again, making eight consecutive monthly gains—the longest streak since measurement began in 2001.

The report showed pending home sales rose 6.1 percent to 110.1 from a reading of 103.8 in August and is 21.2 percent higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.

I agree with NAR’s assessment that the momentum is based on a rush of first-time home buyers trying to beat the expiration of the tax credit at the end of November. We’re feeling that rush in many of our offices.

As to keep things in perspective I would like to point out NAR’s Chief Economist Lawrence Yun’s comments that “We’re clearly not out of the woods because an excess of homes remain on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this income inventory.” That truly is why we are so pleased with the potential of the bill’s passing.

Now, let’s take a look at this week in real estate:

• El Dorado Hills— Inventory is still low and short sales are rising. We have very few REOs but don’t expect to see a flood of activity in that market anytime soon. Buyers are still looking for great deals.
• Elk Grove—We are seeing more and more regular sellers. Agents are feeling hopeful that this is a sign of some normalization. Time will tell. Agents that are knocking doors, calling database…good sound fundamental activities are working….
• Placerville— October was busy and buyers are out looking for well priced properties. The high end is still slow with a lot of competition from buyers. Inventory is still low with very few REOs which helps our market prices stabilize.
• Roseville/Granite Bay— Need fresh inventory. Many short sale offers out!
• Sacramento Fair Oaks— The overall market is stabilizing in prices because of the low numbers in our inventory. The real sellers are getting more involved in our market conditions. They are actually getting off the fence and are making decisions on selling and or buying.
• Tahoe/Truckee—Active Inventory Summary: Active Listings: The listing inventory for the Tahoe-Truckee market continues to go down as homes sell and homeowners take their homes off the market for winter. Currently there are 1,915 active listings - 1,303 residential properties and 612 lots and land listed for sale. Active Listings - REO’s and Short Sales: Of the active listings, there are 169 properties listed as short sales, (8.8%) and 70 properties listed as REO sales, (3.7%). While less than 13% of the active listings are short sales and REOs, roughly 23% of the properties selling are short sales and REOs. Sales Summary: Last Week’s Sales: For the week of October 26th to November 1st it was the third best sales week of the year with 36 properties sold. Of the properties sold last week, six (6) of those sold at a price above $750,000. Coldwell Banker was involved in 11 of the properties sold. Pending Sales: Pending sales decreased once again to 162 properties from the previous week. Market Activity Summary: With the three strongest consecutive sales weeks of the year it is clearly an indication of buyer’s continued interest in well priced properties and the tremendous values which exist in the market. While visitor activity has fallen off with the fall season, buyers who have been watching the market are seizing this unique time to buy Tahoe-Truckee real estate in a down market. Coldwell Banker currently has over 45 homes in escrow scheduled to close in the next 30-60 days.

I wanted to let you know that we are officially making Weekly Market Watch a once every other week publication. With the market changing very little from week to week we just felt it was an obvious choice. If news or the market warrants, we will return to once per week or we will simply provide you with special editions.

We will return with our next edition of Weekly Market Watch on November 19.

Until then,
Make it a great November,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

It’s On The Table!

There’s no question. The government’s first-time homebuyer tax credit has spurred a significant amount of sales this year and its positive impact on the hard-hit housing market warrants an extension. Latest estimates show that some 400,000 additional sales occurred this year due to the first time home buyer tax credit, which is about 8% of all sales this year.

The latest news in the saga, The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers. While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners. The reduced credit would be available to all homeowners who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House.

The U.S. Senate won’t vote until next week at the earliest. As soon as they do we intend to create a piece that will allow you to communicate the news to your clients.

Reports show that Senate action has been delayed by a Republican demand that a vote be allowed on an amendment to end the Treasury Department’s Troubled Asset Relief Program at the end of this year. But lawmakers say they want to prevent home sales from slipping as the economy struggles to recover. And as I mentioned in a previous edition of Weekly Market Watch, that is just what may happen if lawmakers choose to let the tax credit expire.

On the flip side, the Democrats, along with the Obama administration are backing it. “The success of the American economy is closely tied to the success of the housing market; by helping to stabilize the housing market, the homebuyer tax credit has helped to shore up the economy as it begins to recover,” said Baucus, a Montana Democrat. “This would enable an even greater number of potential homebuyers to take the credit.”

Thus far it seems to be doing its job. This week, Business Week reported “The broad improvement in the housing indicators in recent months leaves no doubt that the long-awaited housing recovery is finally under way.” The article went on to report: “Policy alone cannot explain the 24% gain in existing home sales since January, nor the 22% increase in new-home purchases, the 40% rise in single-family housing starts, and the recent upturn in home prices. The primary driver is historically high affordability. Fixed 30-year mortgage rates are at 5%, a multi-decade low, and prices have plunged a total of 30% since May 2006, based on the Standard & Poor's Case-Shiller Home Price Index. By that price gauge, homes are well undervalued relative to both rents and aftertax income.”

Next week I hope to report some positive news on the home buyer tax credit front. Until then, let’s take a look at this week in real estate:

• Auburn— Through October 28th there are 24 pendings and 22 closed escrows with an average price of $400,600 for the southwest area and $294,557 for homes within city limits.
• El Dorado Hills— October has been a bit busier for new sales but many of them are short sales with buyers and Agents experiencing a lot of frustration. Inventory remains low.
• Elk Grove— While short sales and REOs continue to dominate, we are seeing some signs of normalization in the market as traditional sellers are beginning to list and sell. At this point, the affect of this seems to be more psychological than anything else, but it a very positive sign. Buyers are still plentiful and inventory quite low. A comment from one of my Agents sums up the market today nicely: “Real sellers seem to be anxious to take advantage of the low inventory of "real listings". I am experiencing getting more listings that are not short sales or reo properties. I am listing properties for the flip investors. I am still getting multiple (many) offers on the bank owned properties and the poor FHA buyers are really not being able to compete, especially if they need any type of seller contribution for closing costs. There is a very fine line between ‘upping the ante’ and making appraisal.”
• Folsom— Listings are still slow but once again, if a property is priced right it will sell and quick! If the new sales this week 40% were sales of our listings by other brokers and 60% we represented the buyer on another brokers listing.
• Placerville— Sales have been brisk this month and inventory is still shrinking. A few of our buyers will be very happy to hear that the tax credit has been extended.
• Rocklin/Lincoln—Thanks to our new Move-Up Marketer program, we are seeing many good leads and agents have some wonderful stories. One agent now knows the history of a neighborhood and has made a couple of solid contacts in the area. Another came across a possible listing within the first few doors and yet another has a possible new listing and a buyer. Just as importantly, the agents are smiling and are seeing some great responses.
• Sacramento Metro—REOs seem to be picking up…just a little. Lots of short sales.
• Tahoe/Truckee— Active Inventory Summary: Active Listings: The listing inventory for the Tahoe-Truckee market went down slightly again to its lowest level since May of this year to 2,069 active listings - 1,412 residential properties and 657 lots and land listed for sale. Active Listings - REOs and Short Sales: Of the active listings, there are 169 properties listed as short sales, (8.2%) and 74 properties listed as REO sales, (3.6%). While less than 12% of the active listings are short sales and REO’s, roughly 23% of the properties selling are short sales and REOs. Sales Summary: Last Week’s Sales: For the week of October 19th to October 25th it was yet another record breaking week for the year with 37 properties that sold which was identical to last week and the largest single two weeks of the year. Of the properties sold last week, six (6) of those sold at a price above $750,000. Coldwell Banker was involved in 13 of the properties sold. Pending Sales: Pending sales decreased once again to 182 properties from the previous week. Market Activity Summary: With the two strongest sales weeks of the year back to back, it is clearly an indication of buyer’s continued interest in well priced properties and the tremendous values which exist in the market. While visitor activity has fallen off with the fall season, buyers who have been watching the market are seizing this unique time to buy Tahoe-Truckee real estate in a down market. Coldwell Banker currently has over 43 homes in escrow scheduled to close in the next 30-60 days.
• Vacaville-Fairfield— What a great time to be in real estate! Opportunity is knocking in all price ranges! With affordability at an all time high, buyers and investors are out in droves. Most of our markets are back to 2001 prices. So anyone who wanted to buy then, but missed the opportunity is realizing the dream now.
  · For our first time home buyers the city of Fairfield and Dixon are both offering First Time Home Buyer Credits in addition to the (just extended) federal $8,000 home buyer credit.
  · Because our inventory is so low, our prices are actually creeping up. This has been fantastic for our sellers
  · First time and long time investors are snatching up properties that will actually cash flow, allowing them an opportunity for wealth building.
  · Dare I say short sales are actually being negotiated by the lenders and more importantly, closing escrow!

Next week I will release the November edition of Reality Check. In it, we focus on the state of the market and include an interview with me. I think you’ll find it helpful and informative in educating your clients and prospects on the current state of the housing market.

Until then,
Make it a great week,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

“U.S. Economic Recovery on Track”

While we await the results of the possible expiration, extension or expansion of the $8,000 first time home buyer tax credit, one thing is for sure, the economy is moving forward in full force—which is driving consumer confidence. Earlier this week, Reuters.com ran a very interesting story on the U.S. economic recovery and the result was very encouraging. Among the story’s highlights:

• “The U.S. economy is firmly poised for a recovery from its deep recession but growth may be moderate and the job market will not revive immediately, senior White House aide Lawrence Summers predicted on Wednesday.”
• “On the economy, Summers said the $787 billion stimulus package and inventory rebuilding by businesses were among the “dominant drivers” lifting the economy.”
• “It will be some time before unemployment starts to decline. Once it declines it will take a long time to return to normal levels, given how elevated it is…The jobless rate is now at a 26-year high of 9.8 percent.”
• “Most private economists think the recession, which began in December 2007, ended in the third quarter. But there is much disagreement about the path to recovery.”
• “Some see above-average growth continuing through next year, arguing that deep recessions are typically followed by powerful recoveries, helped along by pent-up demand as consumers and companies resume spending.”

Obviously this is welcome news for the economy which ultimately benefits the local housing market. What I can tell you is that I am encouraged by the progress we are making in the real estate market. We’re beginning to see more days of progress than days of back stepping. We’re watching sales activity and consumer sentiment and we are expecting over the coming months a moderate to a more sustainable pace and we will probably see a modest rise in housing prices in the coming year. Will it be the double digit appreciation we saw in the earlier part of the decade? Probably not. But this new normal (as we’re calling it) is much more sustainable and a much healthier path to build upon. It makes me excited about the future and gives us all hope for a relatively modest and productive 2010.

Now, let’s take a look at this week in real estate:

• Auburn--Most short sales are showing as contingent and we need some new listings. The buyers are still waiting for the next surge of REOs and we are using the information provided by the economic report from CAR to show them they should act now. We have gotten a few very good leads from floor. We are also in our 2nd week of the 100 days from Buffini.
• Dixon-Davis--Since we have not had any changes in the last few months I ask for quotes from my Agents to see how they are dealing with our market here is one of them: In doing the research for Coldwell Banker’s "Move up Marketing Program,” I am finding that a great number of homeowners do have equity that they can use to purchase another property that better suits their needs or buy property as an investment. In this time of short sales and REOs it is great to see that there can be some "regular" sellers. All we need to do is go to work and let them know of the great opportunity that exists now. It is Real Estate 101. Door knocking and putting your face and name out there. Marianne MacDonald
• El Dorado Hills-- Inventory continues to drop with only 329 active listings. Our high last year was over 450. Over 1/3 of the actives are short sales and 2/3 of those have offers waiting for bank approval but the REO’s make up only 5% of our market.
• Elk Grove--For September 2009 in the 95624 Zip Code, there were a total of 77 closed sales approximately 43% REO, 27% Short Sales and 30%(28% August) conventional sales. Average sales price was $250k ($230k August) for conventional sales vs. $232 for REO/Short. For 95758 there were 77 sales with approximately 47% REO, 24% Short and 29%( 25% August) conventional sales. While conventional sales average price was $240k, REO’s were $218k and Short Sales were $194k. For 95757, there were 69 sales with 55% being REO, 20% Short Sale and 25% (no change from August) conventional sales. Again, average sales price for conventional sales was considerably higher than REO and Short Sales with averages of $280k, $267k and $247k. The 3 zips combined: 240 closed sales with approximately 47% REO, 24% Short Sales and 29% conventional sales (26% August). From all this, it appears that we are starting to see more conventional sales with average sales prices higher on these sales in 95624 and lower in 95757 and 95758 month over month. No clear trend in sight.
• Folsom--We are looking for more listings! Every week we sell our good listings but we are not replacing our inventory! Closings are strong so we are paying the bills, new escrows are being opened so the pipeline is good, and agent attitude is for the most part good. So, I think the last quarter of 2009 will be the start of a better year in 2010!
• Placerville--We continue to get walk ins nearly every day from all areas. Inventory is “skinny” and good deals go quickly. Inner office networking is paying off and we’re double ending many of our listings.
• Rocklin/Lincoln--Loans are the challenge. It took a week to fund a loan on what should have been a “slam dunk.” We were to fund on Monday but a review of the credit report showed two social security numbers. It turned out the one number was from her ex husband and they had been divorced for 15 years. On top of that there was nothing derogatory but the lender demanded a copy of the divorce decree and then when that was submitted, the lender said they needed proof of the notary being an employee of Old Republic Title and that person had to supply 2 current pay check stubs.
• Sacramento Metro--Inventory in our core areas continue to be slow.
• Sacramento Sierra Oaks--The inventory is very low. A LOT of “frustration” from the Agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
• Tahoe/Truckee--Active Inventory Summary: Active Listings: The listing inventory for the Tahoe-Truckee market went down slightly again to its lowest level since May of this year to 2,083 active listings - 1,423 residential properties and 660 lots and land listed for sale. Active Listings - REO’s and Short Sales: Of the active listings, there are 167 properties listed as short sales, (8.0%) and 68 properties listed as REO sales, (3.3%). While less than 12% of the active listings are short sales and REO’s, roughly 25% of the properties selling are short sales and REOs. Sales Summary: Last Week’s Sales: For the week of October 12th to October 18th there were 37 properties that sold which was the largest single week of sales in 2009. Of the properties sold last week, nine (9) of those sold at a price above $750,000. Coldwell Banker was involved in 12 of the properties sold. Pending Sales: Pending sales decreased once again to 191 properties from the previous week.
• Vacaville-Fairfield--For Solano County we have 1450 active single family homes. 1004 Pending Sale and 245 single family homes have closed escrow in the last 22 days. The lowest selling price as $60K and the highest was $1,556,500. Homes that were on the market 0-30 days sold at 102.68% of their list price and the average days on market to close of escrow is 63 days. As you can deduct from our numbers we are in a robust market with no signs of slowing down.

This week I’ll conclude with a few articles of interest:

• What Housing Bust?; CNN Money

• Housing Tax Credit Working, So Keep Momentum Going, NAR Urges Congress; Realtor.org
• Shape Of The Housing Recovery; CNBC
• Real Estate Outlook: Mixed Signals; Realty Times

Until next week,
Make it a great one,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

Recent Housing Upturn Sparked By Buyer Leverage

The latest S&P/Case-Shiller home price index reveals home price for 10 major cities rose 3.6 percent between April and July. So does this recent uptick in the housing market mean we are on the cusp of a housing boom?

I hate to burst your bubble but probably not. In all likelihood, the recent upturn in the housing market has been sparked by several competing factors:

· The impending expiration of the $8,000 first-time home buyer tax credit
· The recent uptick in the stock market
· Increased consumer confidence
· Continued low interest rates

Essentially, buyers are playing a leverage game. They’re watching the economic indicators and trying to determine the best time (for them) to buy. It seems many are now pulling the trigger which is causing sales figures and prices to go up.

Will it last? It’s tough to say. Right now we’re in a slightly unique position because some of the stimulus packages that the government instituted are working which may be causing a false front for the overall economy. The stock market is up. Consumer confidence is on the rise. The housing market is up. All of those are pointing to some current benefits in the market.
But, the fundamentals themselves haven’t changed. Foreclosures remain a major issue for our economy. And unemployment remains a major challenge. Until those two areas of the economy fully recovery, we may see continued economic volatility.

What I can say is I think the worst of the housing market’s problems are probably behind us. But the road ahead isn’t completely clear. One major factor that stands in our way is the impending expiration of the first time home buyer tax credit. This credit has helped to drive much of our recovery. But right now the debate on Capitol Hill continues and everyone is waiting to learn whether the credit will be extended, expanded or will it simply expire. Many on the opposing side believe it is too costly to finance. But NAR had this to say: “Each home sale pumps an additional $63,000 into the economy through related goods and services, so the benefits of extending and expanding the tax credit far outweigh the costs.”

If the opposing side gets their way and the credit simply expires, NAR had this to say: “All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession. Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit.”

So there you have it. We’re in a state of flux as we await the results of the credit. As that debate continues, buyers seem to be leveraging today’s market advantages which is creating a welcome relief for our local market. Let’s just hope the leveraging opportunities continue.

Now, let’s take a look at this week in real estate:

• Auburn—Most short sales are showing as contingen
• Elk Grove— For September 2009 in the 95624 Zip Code, there were a total of 77 closed sales approximately 43% REO, 27% Short Sales and 30%(28% August) conventional sales. Average sales price was $250k ($230k August) for conventional sales vs. $232 for REO/Short. For 95758 there were 77 sales with approximately 47% REO, 24% Short and 29%( 25% August) conventional sales. While conventional sales average price was $240k, REO’s were $218k and Short Sales were $194k. For 95757, there were 69 sales with 55% being REO, 20% Short Sale and 25% (no change from August) conventional sales. Again, average sales price for conventional sales was considerably higher than REO and Short Sales with averages of $280k, $267k and $247k. The 3 zips combined: 240 closed sales with approximately 47% REO, 24% Short Sales and 29% conventional sales (26% August). From all this, it appears that we are starting to see more conventional sales with average sales prices higher on these sales in 95624 and lower in 95757 and 95758 month over month. No clear trend in sight.
• Rocklin Lincoln—Most short sales are showing as contingent but asset managers are calling to see if they can help for a change. We have four more that appear to be closing this month.
• Sacramento Fair Oaks— REO Activity: The REO activity is still slow in the office. Our REO agents are getting a few new assignments and listings. They are still waiting for the wave to come in. Short Sales: They are steady but still very hard to close. Representing buyers is the most difficult to close do to lack of control of the transaction. Listing Agents are doing fairly well in their closing rate though. Activity over $750,000 slow but it is coming around and we are seeing more sellers requesting market analysis of their properties. This is a good sign for the up and coming year. Additional comments: Agents are still thinking very positive about the market. It is about prospecting and getting out there in the public and asking for the order. If you do not ask them there will be another agent that will.
• Sacramento Sierra Oaks— The inventory is very low. A LOT of “frustration” from the Agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
• Tahoe Truckee— Active Listings: The listing inventory for the Tahoe-Truckee market went down slightly again to its lowest level since May of this year to 2,097 active listings - 1,443 residential properties and 654 lots and land listed for sale. The reduction in listings is part due to sales and in part to expired listings and homeowners taking their homes off the market for the winter. Active Listings - REOs and Short Sales: Of the active listings, there are 166 properties listed as short sales, (7.9%) and 61 properties listed as REO sales, (2.9%). While less than 11% of the active listings are short sales and REO’s, roughly 25% of the properties selling are short sales and REO’s. Last Week’s Sales: For the week of October 5th to October 11th there were 22 properties that sold which was a large drop off from the week prior 33 sales. Of the properties sold last week, three (3) of those sold at a price above $750,000. Pending Sales: Pending sales decreased once again to 210 properties from the previous week. Market Activity Summary: Fall has definitely hit the Tahoe-Truckee area with cooler weather and a much quieter town with respect to visitor activity. While visitor activity is slow, Buyer activity remains encouraging for competitively priced properties. Coldwell Banker currently has over 50 homes in escrow scheduled to close in the next 30-60 days.

This week I’ll conclude with a few story highlights:

• USAA Praises Biggert Bill To Extend First-Time Homebuyers Tax Credit; Reuters
• Hopes Run High For Tax-Credit Expansion; MarketWatch
• Washington Report: $8,000 Home Buyer Tax Credit; Realty Times

Also, CAR released its 2010 forecast this week. Please read it here: http://www.car.org/newsstand/newsreleases/2010forecast/.

Until next week,
Make it a great one,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

Tax Credit: Expand? Extend? Expire?

The question everyone is asking is, will the government expand, extend or simply let the $8,000 first time home buyer tax credit expire. With just over 50 days left until it is expires, the debate is on and everyone is waiting on pins and needles to hear the result.

Whichever side you take on the debate, what you can’t deny is the fact that nothing has done more in the past year to jumpstart our housing market more than the $8,000 first time home buyer credit. Will all of that come tumbling down if it isn’t extended or expanded on? It’s hard to say but I believe that if it isn’t expanded we will see a definite drop in first time home buyers in 2010 and probably a much larger emergence of investors in the entry level arena. While on the surface that may not seem troubling, it actually is. The fact is that investors purchase homes solely for net profit while first time home buyers purchase homes for lifestyle. When we have a balance between the two it keeps home prices relatively stable. If one of the two disappears, we’ll likely start to see drops in home prices which isn’t good for a market that has already taken its fair share of hits.

While Congress continues to debate the issue what we as Realtors are calling for is support of an expansion of the tax credit from first-time buyers to all homebuyers, increasing the maximum amount of the tax credit from $8,000 to $15,000, eliminating the existing income caps for eligibility purposes and extending this homebuyer tax credit for one year from the date of enactment.

We believe that stimulating demand for housing—particularly in the repeat buyer market—is the most effective way for Congress to help lead the U.S. economy into a recovery and back on the path to growth. Timing is critical and we hope that Congress will hear our voices.
While the clock ticks and we await the results of the debate on Capitol Hill, let’s take a look at this week in real estate:

· El Dorado Hills— The inventory is falling and is down close to 10% over the last few weeks. Over 1/3 of the listings are short sales and over half of those have offers and are waiting for bank approval so the true actives are very low. Closings are slower with lots of last minute loan hurdles to jump over.
· Elk Grove— How do you come up with different ways to say the same thing each week…REOs and short sales continue to dominate. We did have a “real” listing that didn’t appear to be priced overly aggressively, receive multiple offers. The only explanation is that there is little inventory and a tax credit that is expiring in November. Agents that are looking for good listing leads are finding them.
· Folsom— Good market but no easy escrows! The Folsom agents were busy with buyers this week with 75% of our total sales on the buying side and only 25% of the time representing the seller. We need more good inventory to sell just like every other office in town!
· Placerville— Inventory is the Placerville area has dropped over the past few weeks and well priced homes are receiving multiple offers. About 25% of the listings are short sales and very few REO’s. We’re seeing incredible bargains in all of El Dorado County so buyers who have been waiting for that great deal better hurry up!
· Roseville Granite Bay— Banks slow on Short Sale approvals
· Sacramento Fair Oaks-We are seeing an increase in sales and activities recently. Agents are working extremely hard on getting listings with the real sellers and the short sale Agents in the office are doing very well. Short sales are closing but taking longer than expected. We are seeing light at the end of the tunner. We just keep pushing forward. Yes, it is a great opportunity to be in real estate, especially with Coldwell Banker.
· Sacramento Metro— Market has really slowed down in our core areas of Sacramento.
Sacramento Sierra Oaks—The inventory is very low. A LOT of “frustration” from the Agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
· Tahoe/Truckee— Active Inventory Summary: Active Listings: The listing inventory for the Tahoe-Truckee market went down to its lowest level since May of this year to 2,121 active listings - 1,456 residential properties and 665 lots and land listed for sale. The reduction in listings is part due to sales and in part to expired listings and homeowners taking their homes off the market for the winter. Active Listings - REOs and Short Sales: Of the active listings, there are 158 properties listed as short sales, (7.4%) and 60 properties listed as REO sales, (2.8%). While less than 10% of the active listings are short sales and REO’s, roughly 25% of the properties selling are short sales and REO’s. Sales Summary: Last Week’s Sales: For the week of September 28th to October 5th, there were 33 properties that sold which was the highest singles week for closed properties in all of 2009. Of the properties sold last week, four (4) of those sold at a price above $750,000. Coldwell Banker was involved in 11 of the 33 closed properties either on the listing or selling side of the transaction. Pending Sales: Pending sales decreased once again to 217 properties from the previous week. Market Activity Summary: Fall has definitely hit the Tahoe-Truckee area with cool weather this past week. The town was quiet and while open house activity was slow, sales for the week were at a yearly high…go figure. Buyers for competitively priced properties continue to be strong. Coldwell Banker currently has over 50 homes in escrow scheduled to close in the next 30-60 days.
· Vacaville— With rates low and affordability back we have a tremendous amount of buyers who recognize the opportunity in this market. But, we continue to have an inventory shortage, our median sold price continues to improve indicating that we are no longer in a declining market. In September we only had 1868 homes to sell compared to September of last year when we had over 4400. Our median sales price is hovering right around 200K and right now the bulk of our inventory is short sales.

Here are a few informative links regarding the $8,000 tax credit that you may find helpful:

• Update: Industry Makes Case For Home Buyer Tax-Credit Extension; Wall Street Journal
• Builders Urge Congress To Act On Home Buyer Tax Credit, Appraisal And Lending Issues; National Association of Home Builders
• Homebuyer Tax Credit Best Tool For Sustaining Housing Recovery, Says NAR; NAR
• Make The Home Buyer Tax Credit More Easily Available At Closing; RISMedia
• 1.4 Million Families Have Taken Advantage Of First-Time Home Buyer Tax Credit, More Claims Expected; RISMedia

Until next week,
Make it a great one,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

S&P Reports On The State of the Housing Market

One of the founders of what has really become the industry’s (and media’s) bible for real estate statistics and forecasts, S&P Case Shiller, recently participated in a Q&A about the state of the housing market. Robert Shiller, a Yale University economist, discussed the housing market and the implications of lower interest rates. I found it quite conservative yet insightful and in my opinion, on target with what is going on in today’s market.

That is why for this edition of Weekly Market Watch, I am going to provide you with an excerpt from his interview:

Is the slump in U.S. home prices bottoming out?

Shiller: The situation has definitely changed. With our numbers — the S&P/Case Shiller home price index — going up sharply. It looks like a major turnaround. We’ve been watching that for three months now, and we have some concern that it could be an aberration and temporary. But, at this point, it seems to be evident in just about every city in the U.S. That suggests it’s real. But it probably isn’t the beginning of a major boom, just because the economy is in such bad shape. There’s also a chance that it will reverse. It’s still only three months old, so it’s very hard to be sure at this point. The most likely scenario is that it won’t continue at this high rate of increase, but that it will neither go down a lot, nor up a lot.

So the index will move sideways for a while?

Shiller: Yes, for a while, meaning five years.

What are the main factors driving U.S. house prices? What could push them up, or cause another slump?

Shiller: The main factor is the world economic crisis and the efforts of governments around the world to stimulate the economy. Parts of those efforts have been directed at the housing market. In the U.S., there is an 8,000 dollar first-time home buyer’s tax credit which expires at the end of November. That’s a reason for concern, as it comes to an end. Also, the Federal Reserve has a plan to buy $1.25 trillion worth of mortgage-backed securities to support the housing market. They are most of the way through the program and anticipate phasing it out at some time in 2010 - that’s another thing that will go away. We’ve yet to see how the housing market will continue. Part of the problem is that people are buying now rather than later. When later comes, there could be a downturn in the market.

Is there an oversupply of houses in the U.S.?

Shiller: That’s been a problem. The inventory of unsold houses has been high, but has come down a bit. On top of that, there will be more foreclosures, more homes are going to be dumped on the market as people default. Now, that may show down as home prices will start going up again. But I suspect that this isn’t going to happen. Also, banks have more REO, or real estate owned, that they’re holding on to for the time being. But eventually those REOs are going to be dumped on the market. So that’s why it doesn’t look particularly encouraging from a supply consideration.

Turning to interest rates, which are at exceptionally low levels: Is there a risk that this eventually will cause irrational exuberance?

Shiller: There is always a risk of that. Those things are hard to predict. However it seems like the present time is least conducive to bubbles of any time. We’re in what some people call “pretend-and-extend” economy, which means that banks that have commercial loans are often extending those loans and pretending that the property is worth something. That’s because they don’t face reality. This kind of economy isn’t really suited to a beginning of a real bubble. Now, everything could change… It’s surprising how strong the residential, single-family home market looks right now. It makes me think that it’s hard to predict animal spirits.

How long can central banks afford to keep expansive policies in place?

Shiller: In principle we can keep this in place for a long time. That’s what Japan did… But confidence is definitely coming back. The depression scare is over at the moment. So it would be plausible that central banks could be raising interest rates — both in the U.S. and Europe — [as early as next year]. But I just have a worry that this isn’t going to happen and that it’s not going to be so easy to extricate [themselves from the low-rate environment].

Will the sharp increase in global debt levels drive up inflation over the medium to long-term?

Shiller: My best guess is that we won’t have inflation, that central banks will pull it back as inflation starts to begin. But I think that there’s a chance of it; people have to be defensive in their investments. It always amazes me that people are so trusting and that they want nominal debt as much as they do… So a good long-term strategy is to invest a good part of one’s portfolio in inflation-indexed bonds, even though it doesn’t particularly look like the time to worry about inflation right now.

I tend to agree with Shiller on many of his statements, specifically that we are probably in the midst of a turnaround. Having said that, it is important to point out that this isn’t going to be a sharp “V” recovery with a sudden jump in prices or units. In all probability what we will see is a long “L” shaped broad recovery in which prices are relatively stagnant for some time before eventually inching up.

Now, let’s take a look at this week in real estate:

· Auburn—Agents are trying to stay upbeat but they are pretty beat up by the buyers regarding the lack of inventory. We did get one short sale approved this week even after the mortgage insurance company said no. We will have another short sale approved by the end of this week. It is great seeing some of the short sales come to closing.
· El Dorado Hills—The market remains the same. The pending listings are about the same as the new listings coming on the market so the inventory is still at about 361 active listings. Short sale listings continue to rise but the REO listings are still under 10% of the inventory. More NODs are being filed so Agents need to be aware when working with investors.
· Placerville—The entire El Dorado County market is pretty much the same. We’re seeing a few more REO’s come on the market but they are almost always priced competitively and sell with multiple offers. We’re seeing a lot of FHA first time homebuyers. The short sale listings make up almost 40% of the Placerville area inventory.
· Rocklin-Lincoln—We had a great speaker that stressed getting back to the basics and then CoreFact showed us some of the tools that they have that might help the Agents become successful. We have several Agents participating in the Move up buyer program.
· Roseville/Granite Bay—Look for opportunities. The push is on for saleable listings with REO lull in current mode.
· Sacramento Metro—Good priced properties in East Sacramento, Land Park and South Land Park continue to sell very quickly.
· Sacramento-Sierra Oaks—The inventory is very low. A LOT of “frustration” from the Agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
· Tahoe/Truckee—Active Inventory Summary: Active Listings: The listing inventory for the Tahoe-Truckee market went down slightly for the week to 2,223 active listings - 1,536 residential properties and 687 Lots and land listed for sale. The reduction in listings is part due to sales and in part to expired listings and homeowners taking their homes off the market for the winter. Active Listings - REOs and Short Sales: Of the active listings, there are 160 properties listed as short sales, (7.2%) and 57 properties listed as REO sales, (2.6%). While less than 10% of the active listings are short sales and REO’s, roughly 24% of the properties selling are short sales and REOs. Months of Inventory: Based on the current inventory and sales for the previous 30-day period, the market has roughly 15-months of inventory available. There is definitely a large inventory of homes for buyers to choose from at great prices. Sales Summary: Last Week’s Sales: For the week of September 21st through 27th there were 30 properties which closed in the market which is a slight increase from the previous week. Of the properties sold last week, five (5) of those sold at a price above $750,000. Pending Sales: Pending sales decreased to 226 properties from the previous week. Market Activity Summary: With the end of the summer season and beginning of fall, visitor traffic has slowed and open house activity is fair. However, sales this past week were consistent with weekly sales averages since early August. Buyers for competitively priced properties continue to be strong. Coldwell Banker currently has over 54 homes in escrow scheduled to close in the next 30-60 days.

Without a doubt, locally what continues to push our market in the right direction is the $8,000 first time home buyer tax credit. Currently in Washington D.C., real estate industry representatives and government officials are lobbying for either a $15,000 all home buyer tax credit or at minimum, an extension of the $8,000 first time home buyer tax credit but the result of that debate is still in the air. If the tax credit does disappear we are likely going to see an emergence of investors in the first time home buyer arena which may cause problems with housing prices and a continued erosion of the first time home buyer market. Please contact your local representative to call upon his/her support of this important initiative.

Next week I will release the October edition of Reality Check. This month’s edition will feature a Q&A from me on the local housing market and what we may expect for 2010.

Until then,
Make it a great week,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

“The patient is out of intensive care, but still has a very long road ahead to a clean bill of health.”

Those were the words last week from Fannie Mae Chief Executive Officer Michael Williams. The CEO went on to say, “Anyone looking objectively at the economy and the housing market sees hope.”

Another good solid indicator of what I’ve been saying in my weekly updates. The U.S. housing market still has a long road ahead but we are making some definite moves towards a housing recovery. So what’s the challenge? Well for starters, rising unemployment numbers aren’t helping. The United States Department of Labor reported in its September 4 Economic Situation Summary that the number of unemployed persons increased by 466,000 to 14.9 million and the unemployment rate rose by 0.3 percentage point to 9.7%. Just to give you an idea, since the recession began in December 2007, the number of unemployed persons has risen by 7.4 million, and the unemployment rate has grown by 4.8 percentage points.

We also need to couple that with the challenges in the mortgage industry. Bloomberg reported, “The mortgage market is still dependent on government-affiliated programs, with private banks providing just 10 percent of loan liquidity, down from about 60 percent in 2006. Fannie Mae and Freddie Mac are responsible for about 70 percent of all new mortgages, while the Federal Housing Administration accounts for about 20 percent.”

Before we can be truly reformed, we need to get into a position where there is more of a balance between private bank loans and Fannie Mae and Freddie Mac loans. In all actuality, we probably won’t see that for some time.

Having said that, U.S. mortgage applications surged last week with demanding rising to its highest level since late-May as consumers sought to take advantage of the lowest interest rates in months, according to Reuters.

The Reuters article reported, “While home refinancing loans dominated demand, the appetite for applications to buy a home, a tentative early indicator of sales, hit its highest level since early January. The overall trend bodes well for the hard-hit U.S. housing market, which has been showing signs of stabilization.”

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications which includes both purchase and refinance loans, for the week ended September 4 increased 17.0 percent to 648.3, the highest level since the week ended May 29.

These are all very positive indicators that showcase that we are on the right track…it’ll probably be a slow track…but we’re on the right one.

Now let’s take a look at this week in real estate:

• Auburn—The energy of the Agents is amazingly positive even with the challenges of this market. A couple of the Agents attended the Buffini workshop and said that Brian Buffini used the analogy of the Rocky movie with the scene where Rocky’s face is bloody and swollen and said that is where we are in the market today and having come through this we just need to hang in there and we will survive.
• Elk Grove—For the month of August there were a total of 254 closed sales. Of these, 50.4% were REO, 23.2% were short sales and the remaining 26.4% were traditional sales. It goes without saying that with 75% of the business in the hands of lenders either releasing inventory or approving a short sale, Agents need to work extremely hard for every deal.
• Folsom—The market is crazy but very frustrating to both the buyers and the Agents!! Agents are getting a lot of practice writing offers, but difficult to get into escrow! Floor time is good and open houses are still a good place to meet buyers. Sellers in the higher priced properties are getting some lookers, but still quite slow.
• Rocklin-Lincoln—Still not enough inventory but we have two new Agents that have been in the business for a month or less and each have a pending sale. We have qualified buyers but not enough in the under $300,000 inventory.
• Roseville-Granite Bay--We're seeing many short sale offers though overall, sales activity is decreasing. Activity on listings above $750,000 is very slow.
• Sacramento Sierra Oaks—The inventory is very low. A LOT of “frustration” from the Agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
• Tahoe-Truckee— Inventory Summary: nnActive Listings: The listing inventory for the Tahoe-Truckee market went down 2% for the week to 2,269 active listings - 1,587 residential properties and 682 lots and land listed for sale. REOs and Short Sales Active Listings: Of the active listings, there are 159 properties listed as short sales, (7.0%) and 63 properties listed as REO sales, (2.8%). Overall, the Tahoe-Truckee market has less than 10% of its active inventory listed as a short sale or REO. Months of Inventory: Based on the current inventory and sales for the previous 30-day period, the market has roughly 17-months of inventory available. Lots to choose from if you are a buyer! Sales Summary: Last Week’s Sales: For the week of September 7th through 13th there were 22 properties which closed in the market which is half of what closed the previous week. Of the properties sold last week, two (2) of those sold at a price above $750,000. Of last week’s sales, Coldwell Banker was involved in 13 of the transactions, (6 listings sold and 7 buyer sales). Pending Sales: Pending sales increased to 225 properties from the previous week. This is yet another indication of buyer interest in Tahoe-Truckee real estate and the increased affordability of our homes. Market Activity Summary: Open house activity has slowed along with the visitor activity in the area. However, the level of buyer interest and offers on homes has remained brisk given the motivation of buyers to secure great deals in the market and motivated sellers who want to sell before the winter. Coldwell Banker currently has over 59 homes in escrow scheduled to close in the next 30-60 days
• Vacaville-Fairfield— Our current active inventory for Vacaville is 370 active listings. Of those 171 are “Contingent Show” (a sub category of our MLS system) and 199 are available for an offer. Since 9/1/09 219 are Pending and 42 are Sold. All of our listings that are priced correctly up to the $375K range are receiving multiple offers. Our Agents are out pounding the pavement looking for inventory. They are busy educating the public that now is a great time to sell and buy.

I did want to let you all know that I will be taking next week off of Weekly Market Watch but I will return the following week with another robust edition.

Until then,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

“Yes, the housing market has rarely looked better.”

That was the headline in a September 2 Wall Street Journal article. Click here to access it: http://online.wsj.com/article/SB10001424052970204047504574386802310702622.html. This was a really interesting piece which looked at numbers from Standard & Poor’s and NAR. Following is an excerpt from the article:

“Last week, Standard & Poor's reported that its S&P/Case-Shiller U.S. National Home Price index of real-estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.

In short, the data suggest that real-estate prices hit a bottom some time during the second quarter, and have now begun to rise. There's no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free-fall. That means if you've been sitting on the fence, it's time to act.

Ordinarily I'd never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock. But with real-estate prices nationally now down about 30% from their 2006 peak and showing signs of turning up, the prices aren't likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can't imagine a better time to buy than now.”
This of course is what I’ve been saying for some time and it is nice to see it in black and white in a reputable publication like The Wall Street Journal. The fact is, while we may have a long road ahead, we probably have hit bottom and if you were considering buying you probably should consider acting now before it is too late.

And with that said, let’s take a look at this week in real estate:

• Auburn—The Auburn area was impacted greatly over the past week with the 49er fire. We have spent many hours receiving and delivering donations to the various drop off locations. The Agents are educating their clients on the importance of making sure the contractors they hire are properly licensed and have done a background check for any issues they might have had in the past or complaints from past clients.
• Dixon/Davis— Not much change from prior weeks. Need inventory, we have lots of buyers and no houses to sell. We have 20 active homes in Dixon! New listings sell in one day, multiple offers.
• El Dorado Hills— Very stable inventory at about 355 active listing. One third of these are short sales and only 20 are REOs. Our sales the last week range from $114,000 to $1,200,000 and closings range from $40,00 to $1,000,000. All over the place.
• Elk Grove—Prices have bottomed…it appears. Inventory continues to be extremely low.
• Folsom— The Folsom market is really heating up again! If a property is priced right, expect multiple offers. Attitude in the office is very good and for the Agents that are working this is a great time to be in real estate!
• Placerville— We’re having a busy month so far with many walk ins and floor calls. Our inventory is still stable, 177 active listings with 38 short sales and 17 REOs. Business has been brisk.
• Rocklin/Lincoln—Agents held open houses on Sat., Sun., and Monday and had a good turnout at most. The most open house had 12 people on one day but the Agents are now working with several leads from these and one person was looking to list their home and the Agent will meet them tonight. The general consensus is that there are qualified buyers, many with cash, but not enough inventory.
• Roseville/Granite Bay—Lots of short sale inventory.
• Sacramento Sierra Oaks—The inventory is very low. A LOT of “frustration” from the Agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
• Tahoe/Truckee— Active Listings: The listing inventory for the Tahoe-Truckee market went up slightly for the week to 2,315 active listings - 1,625 residential properties and 690 lots and land listed for sale. REOs and Short Sales Active Listings: Of the active listings, there are 152 properties listed as short sales, (6.6%) and 63 properties listed as REO sales, (2.7%). Overall, the Tahoe-Truckee market has less than 10% of its active inventory listed as a short sale or REO. Months of Inventory: Based on the current inventory and sales for the previous 30-day period, the market has roughly 18-months of inventory available. Lot’s to choose from if you are a buyer! Last Week’s Sales: For the week of August 31st to September 6th there were 40 properties which closed in the market which is double the closes in any one week this year. Of the properties sold last week, eleven (11) of those sold at a price above $750,000. It was a great week for sales. Pending Sales: Pending sales remained constant at 215 properties from the previous week. This is yet another indication of buyer interest in Tahoe-Truckee real estate and the increased affordability of our homes. Market Activity Summary: Labor Day weekend was a busy weekend in town with visitors to the area enjoying the last long weekend of the summer in Tahoe. Coldwell Banker conducted 18 open houses with decent activity at the homes. The one constant remark we are hearing from our Sales Associates is that buyer activity is as brisk as it has been in the last 18-24 months and that many are thinking this is the time to buy. Coldwell Banker currently has over 55 homes in escrow scheduled to close in the next 30-60 days.

This week I’ll leave you all with the reminder that the $8,000 federal tax credit for first-time homebuyers is scheduled to expire on December 1. However, in order to qualify, the transaction must be closed on or before November 30, essentially leaving first-time buyers with less than three months to complete the process.

While the urgency of trying to find and close on a home before the deadline may seem stressful, it doesn't have to be. Just contact your Realtor today and they can walk you through the process or visit us online at CaliforniaMoves.com.

Until next week,
Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

Good News On Wall Street Doesn’t (Necessarily) Mean Higher Housing Prices on Main Street

I had an interesting chat with one of our Agents recently. She mentioned that many of our sellers in the upper-tier price point are seeing the current strength of the Dow as a sign that their home will probably fetch more in the early part of next year. Academically speaking, there is a belief that there is a direct correlation between the housing market and the stock market.

But from an analytical standpoint, although the stock market and the housing market correlate well, there is a variable time lag. The time lag between housing underperformance and stock market performance can vary widely. The average is 18 months.

What we’re seeing, in some instances, is that some of the upper-tier clients are saying no to potential deals as they think if they wait another four to six months (thanks to the stock market’s recent gains) they may get more for their home. And while I understand the reasoning, I would caution sellers on this strategy. First, what we know is that in a “normal” market (of which this market is anything but), the average lag time between the two is 18 months (not four to six months). It’s also important to point out that we probably aren’t out of the woods as it relates to the volatility in the stock market. Many analysts are suggesting that our recovery will be “W” shaped rather than “V” so we may be looking at more changes ahead.

So while I understand the logic, I would caution sellers on this strategy and would ask them to focus less on the stock market and more on the level of supply and demand in their market and in their neighborhoods. In most markets, the upper-tier price point remains relatively soft so sellers should consider most deals that are presented to them. That’s not to say buyers should be throwing out unrealistic offers. The real story here is that across the board we’re starting to see increases in interest and buyer activity so sellers may want to consider taking advantage of that interest…before it’s too late.

For those who are focused on the stock market, my best advice to you is to look at it more as an indicator for the economy as a whole. With the DOW closing Thursday at just over 9,300, it may not be making housing prices go up, but it may mean that the recession is subsiding which is good news for us all.

Now let’s take a look at this week in real estate:

• Auburn— Quiet this week but Agents are all busy writing offers but it is just hard to get accepted. Buyers are still not believing that the offer on an REO needs to be 10% or more over list price in most cases.
• Dixon/Davis—Not much change from prior weeks. We need inventory. We have lots of buyers and no houses to sell. We have 20 active homes in Dixon! New listings sell in one day with multiple offers.
• Folsom—Buyers are still writing offers on multiple properties.
• North Lake Tahoe/Truckee— Active Listings: The listing inventory for the Tahoe-Truckee market went down slightly last week to 2,367 active listings in the market - 1,677 residential properties and 690 lots and land listed for sale. Active REOs and Short Sales: Of the active listings, there are 147 properties listed as short sales, (6.2%) and 64 properties listed as REO sales, (2.7%). Overall, the Tahoe-Truckee market has less than 9% of its active inventory listed as a short sale or REO. Active Inventory: Based on the current inventory and sales for the previous 30-day period, the market has roughly 23-months of inventory available. Sales Summary: Last Week’s Sales: For the week of August 10th to August 16th there were 22 properties which closed in the market with four of those sold at a price above $750,000. This past week’s closings were up slightly from the previous week. Pending Sales: Pending sales in the market increased to 209 properties which is slightly higher from the previous week. Market Activity Summary: Open house activity continues to be fair to good depending on the location of the open house. We are definitely seeing more tourists in town given the season which certainly creates more real estate interest and activity. Sales Associates are continuing to see more buyer activity and more and more are writing offers than in the previous six-months. Coldwell Banker currently has over 51 homes in escrow scheduled to close in the next 30-60 days. Lake Tahoe and Truckee properties are priced at levels we have not seen in five years and coupled with today’s low mortgage rates present great opportunities for interested buyers. Now is the time to buy!
• Rocklin/Lincoln— Quiet this week but Agents are all busy writing offers, just hard to get accepted. Buyers are still not believing that the offer on an REO needs to be 10% or more over list price in most cases. We are starting to see some land sales. The prices have fallen and as an example a lot in Morgan Creek that originally sold for about $300K sold for under $100K and included paid fees and plans.
• Roseville/Granite Bay— Agents are aggressively working on short sale listings!
• Sacramento Metro— Market seems to have slowed down during the summer months and we continue to see no activity in the move up buyer.
• Sacramento Sierra Oaks—The inventory is very low. A LOT of “frustration” from the Agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
• Vacaville/Fairfield—First time home buyers, move up buyers and investors are in the marketplace. For those who are fortunate enough to secure a property, the buyers are typically offering more than the asking price. Cash continues to be king, followed by FHA and then VA. With the offers higher than the asking price, appraisals are an issue.

This week I’ll leave you with a few good articles of note:

• Mortgage Applications Increase In Latest MBA Weekly Survey; Mortgage Bankers Association
• Optimism Grips Homeowners: 81% Think Home’s Value Will Increase Or Stay Same In Next 6 Months; RISMedia
• Are New Home Prices, Starts And Sales Rates Nearing Bottom?; RISMedia

Until next week,
Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

They’re Saying The Worst is Behind Us…But Is It Too Soon to Celebrate?

I was driving home from an office meeting this week and was listening to NPR. During the drive, an interesting update came on which mentioned that the Federal Reserve was reporting that the recession is ending and that it would take a step back toward normal policy.

When I got home I decided to Google the news and I found this article on the NYTimes.com website: http://www.nytimes.com/2009/08/13/business/economy/13fed.html?_r=2&partner=rss&emc=rss&src=igw. The article reports, “Almost exactly two years after it embarked on what was the biggest financial rescue in American history, the Federal Reserve said on Wednesday that the recession is ending and that it would take a step back toward normal policy.”

The article goes on to note “Though the central bank stopped well short of declaring victory, policy makers issue their most upbeat assessment in more than a year by saying that the downturn appears to have hit bottom and that consumer spending, financial markets and inventory building by corporations all continued to stabilize.”

Well never one to solely rely on just one institution’s opinion, nor that of just one article, I decided to put my feelers out. I reached out to mortgage broker colleague to get his take and to learn more about what our mortgage colleagues are seeing in relation to the current state of the economy. He had some comments that I tend to agree with noting that “Many are concerned we’re going to have a ‘W’ shaped recovery versus a ‘V’ shaped recovery. We don’t want to proclaim the recession is over, only to see the economy struggle for another year. It’s going to be a long, slow recovery. One month we may have positive economic news and the next, poor economic news.”

Having said that, here is what we tend to be seeing about the market:

• It does appear that the worst of the recession may be behind us.
• In all likelihood, the Fed is going to keep rates relatively low well into next year by continuing to purchase mortgage backed securities and keep the Federal Funds Rate close to zero. It is currently at .25%.
• In terms of conforming loan limits, as of right now, the higher conforming loan limits will end at the end of this year. There is some legislation that is pending to renew the higher loan amount through until November 2010 but as of right now, that is pending. The same holds true for the first-time home buyer tax credit.

Knowing this, what lies ahead? Well I would say it’s positive to know that the worst may be behind us, but in all likelihood there are still challenges ahead. There is still much recovery that needs to take place, so neither sellers nor buyers should be getting too excited with the news. Sellers still need to get a bit more realistic about price and buyers need to recognize a bargain when they see it.

And with that news in tow, let’s take a look at this week in real estate:

• Auburn—Quiet this week but Agents are all busy writing offers, just hard to get accepted.
• Dixon/Davis—No information reported.
• El Dorado Hills—The buyers are waiting in the wings. We have 20 pendings in EDH so far this month for the entire city. Prices are attractive. We had 72 solds last month and lots of activity, just very few new sales. Homes must be priced very aggressive to be considered. Inventory remains at the same level.
• Elk Grove—For the first time in over a quarter the average sales price increased in our zip codes. Typical low inventory challenges prevail, buyers are fighting over property and it doesn’t appear to be getting better anytime soon.
• Folsom—Open house activity good. Closings were down last week. End of summer, always slower.
• Placerville—Inventory has dropped some and activity has slightly slowed. Prices seem to be stabilizing.
• Rocklin/Lincoln—Seems to be a little more quiet than usual with many finishing up vacations and others getting ready to go back to school.
• Roseville/Granite Bay—No information reported.
• Sacramento Fair Oaks—Yes overall the market has been slower. The buyers are still out there looking but the inventory is extremely low. We are seeing more multiple offers and homes going over asking price. We are of course seeing issues with homes appraising. In my office the agents are confident that the market is going to get better. They also keep a positive outlook and share that with their clients and prospects.
• Sacramento Metro—Market seems to have slowed down during the summer months and we continue to see no activity in the move up buyer.
• Sacramento Sierra Oaks—The inventory is very low. A lot of “frustration” from the agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
• Tahoe/Truckee—No information reported.
• Vacaville/Fairfield—No information reported.

In terms of marketing activity, in general, depending on the price range, most homes are on the market longer with discerning buyers waiting for the optimal home at the optimal price. A well-priced, well-presented home can still fetch multiple offers (especially if it is in the entry-level market), but it’s got to look appealing to the savvy buyers who are doing their homework. There is no sense in overpricing a listing – a buyer won’t even give a home the time of day if they sense the seller is being unrealistic.

Yet at the same time, there seems to be no better time to snatch up bargains in Northern California at all price points. We’re seeing five to 10 percent reductions in properties that are sitting on the market and in many cases the final offers are coming in below those reductions. That’s not to say buyers should throw out ridiculous numbers. Some sellers who don’t have to sell are holding firm, but time is running out for others. So, while it may take longer to get the buyer and seller to agree to terms, deals are happening and with open minds on both sides, we might start to see more positive movement for all.

Until next week,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe

One Good Week of News Leads to Another

Following last week’s breaking housing news which revealed that based on the Standard & Poor’s/Case-Schiller 20-city index, home prices in May posted their first monthly increase since the summer of 2006.

The news followed reports showing sales of newly built and existing homes rose in June for the third consecutive month. New home construction, though still weak, is the best it has been since the fall.

Well this week the good news continued. The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending July 31, 2009 showcasing an increase in mortgage loan application volume of 4.4 percent from the week earlier. On an adjusted basis, the Index increased 4.1 percent compared with the previous week and 18 percent compared with the same week one year earlier.

The Refinance Index increased 7.2 percent from the previous week. The Index has climbed about 35 percent above its recent low at the end of June. The seasonally adjusted Purchase Index increased 0.9 percent from one week earlier.

Also interesting to note is this week’s release of the National Association of Realtors’ Pending Home Sales Index in which it revealed an increase of 3.6% during the month. That was 6.7% higher than June 2008. It was the fifth straight month of increases, the first time that has happened since July 2003. The jump was much higher than expected with a consensus of industry experts put together by Briefing.com forecasting an increase of just 0.7%.

NAR’s Chief Economist Lawrence Yun had this to say, “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines.” It seems all of these incentives, much like the Cash for Clunkers program in the auto industry, is finally pushing people off of the fence.

Now, let’s take a look at this week in real estate:

• Auburn— Lender requirements are very strict and several contracts have fallen out with some of the new regulations.
• Dixon/Davis—No information reported.
• El Dorado Hills— Inventory is stable but buyer activity is slow. School starts in a week or so. Hopefully it will pick up then.
• Elk Grove/Laguna— Very low inventory is persistent. Buyers are everywhere, but it is difficult for first timers and buyers with lower down payments. Cash reigns as king.
• Folsom— Open Houses seem to be slower. Floor has been steady and the quality of the calls has been very good. Activity in the higher priced listings is starting to wake up with one sale this week at $750,000 and another one at $965,000. Quite a few Agents are working with buyers and the attitude seems to be good!
• Placerville—Inventory now has about 25% short sales but very few REOs. We’ve had several walk-ins the last week but it’s still difficult to get them to make a move.
• Rocklin/Lincoln—Agents were pleased to hear that the “noise” we are making in regards to HVCC is being heard and one of the changes so far, is that they will be using appraisers local to that area. This also was highlighted in another real estate publication this week to illustrate the need for us to be more vocal if we want change.
• Roseville Granite Bay—Both listing and sales inventory is steady in our area. We saw six multiple offers this week and double that in ratified offers. An average number of opens: five with moderate traffic. Bank of America REOs are coming in two weeks!
• Sacramento Fair Oaks—Yes overall the market has been slower. The buyers are still out there looking but the inventory is extremely low. We are seeing more multiple offers and homes going over asking price. We are of course seeing issues with homes appraising. In my office the Agents are confident that the market is going to get better. They also keep a positive outlook and share that with their clients and prospects.
• Sacramento Metro—Market seems to have slowed down during the summer months and we continue to see almost no activity in the move up buyer.
• Sacramento Sierra Oaks—The inventory is very low. A LOT of “frustration” from the agents in getting appraisals and loans. The whole process is getting bogged down and taking a lot longer.
• Tahoe/Truckee— Active Listings: The listing inventory for the Tahoe-Truckee market went down last week for the first time in four months to 2,364 active listings in the market - 1,680 residential properties and 684 lots/land listed for sale. Active REOs and Short Sales: Of the active listings, there are 143 properties listed as short sales, (6.0%) and 63 properties listed as REO sales, (2.7%). Overall, the Tahoe-Truckee market has less than 9% of its active inventory listed as a short sale or REO. Active Inventory: Based on the current inventory and sales year to date the market has roughly 23-months of inventory available. Sales Summary: Total Sales 2009 vs 2008: On a year to date (YTD) basis there have been 469 properties sold in the market as compared to 572 for the same period in 2008 which is (18.0%) reduction in sales. For properties sold YTD 2009, 58 were REO’s, (12.4%), and 50 were Short Sales, (10.7%). For 2009, there have been 263 properties sold < $500,000, 156 properties sold between $500,000 and $1,000,000 and 50 properties sold > $1,000,000. Median and Average Sales Prices 2009 Vs 2008: The median sales price for the properties sold YTD in 2009 increased slightly to $453,000 while the average sale price is dropped to $569,834. For the same period in 2008, the median sales price was $515,000 and the average sales price was $718,986 which is an (12.0%) and (20.7%) reduction in price respectively. Last Week’s Sales: For the week of July 27th to August 2nd, there were 22 properties which closed in the market with two (2) of those sold at a price above $750,000. This past week’s closings were up slightly from the previous week. Pending Sales: Pending sales in the market increased to 182 which is slightly higher from the previous week. Market Activity Summary: Open house activity continues to be fair to good depending on the location of the open house. We are definitely seeing more tourists in town given the season which certainly creates more real estate interest and activity. Sales Associates are continuing to see more buyer activity and more and more are writing offers than in the previous six-months. Coldwell Banker currently has over 45 homes in escrow scheduled to close in the next 30-60 days. Lake Tahoe and Truckee properties are priced at levels we have not seen in five years and coupled with today’s low mortgage rates present great opportunities for interested buyers. Now is the time to buy!
• Vacaville/Fairfield—Solano County Coldwell Banker Agents are extremely resourceful. They are taking advantage of this lull in REO inventory and creating business the old fashioned way – by reaching out to their client base and community to help clients buy and sell homes. The agents are on FIRE and excited about this market and the opportunity it presents!

My overall synopsis of the market this week is much like it has been over the last several. Low-end sales have been the strongest segment of the market, an indication that the first-time homebuyers tax credit is contributing to the rise. The clock, however, is ticking on this credit and it may have buyers stepping up their shopping to get their purchases in under the wire. Because it may take as long as two months to close on a home after signing a contract, first time home buyers must act fairly soon to take advantage of the credit. To qualify, they must close on the sale by November 30.

Until next week,
Make it a great one,

Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe