Thursday, April 9, 2009

Are Happy Days Here Again?

We awoke Thursday morning to some very positive economic news—Wells Fargo reported a better-than-expected first quarter profit of $3 billion surging the company’s stock by 32% and boosting shares of many other big banks as investors bet that Wells Fargo’s peers may also post results that exceed Wall Street’s estimates. The hope by all involved is that the banking sector is stabilizing. Much of Wells Fargo’s recent success is in part related to the recent increases in mortgage loan applications which could be a strong sign that consumer confidence is on the rise.

Also revealed this week is the fact that new jobless claims fell more than expected. The Labor Department said Thursday that the tally of initial jobless claims fell to a seasonally adjusted 654,000 from a revised 674,000 the previous week. Analysts expected claims to drop to 660,000

This week there were so many positive headlines that, rather than provide you with my ongoing synopsis, I thought I’d give it to you straight from the horse’s mouth. Yes, even the media is now on board with the positive headlines which tells me that the market is definitely changing.

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

  • Auburn—Listing inventory is about the same this week while sales inventory is changing. REOs declined and short sales increased. We had one short sale accepted and another waiting approval from the second. We have had several floor calls from prospects here for Easter. Two of our listings came from floor calls. We are still writing several offers for each buyer before they are in contract.
  • Dixon/Davis—We had six REO listings this week. We have a lot of contracts out right now waiting on acceptances or counters. Short sales and REOs are our market! Half of Dixon’s active inventory is contingent because of short sales.
  • El Dorado County—The El Dorado County market is moving steady. Floor in both offices has been busy with walk-ins in both offices and two listings taken in El Dorado Hills from floor calls. Good follow up by the floor Agent. Open house activity is steady. The inventory is down a little this week but the percentage of short sale listings is up and the number of REO listings is down. Most of the accepted offers are below $500,000. Placerville has only 10% of the listings are short sale listings. Pending price range is also lower than last year.
  • Elk Grove/Laguna—The phones are ringing off the hook. One Agent had 11 calls in a two hour shift. Inventory is extremely low and REOs aren’t coming on as fast as they were. Anything priced reasonably well is receiving a lot of activity. Multiple offers are very common place.
  • Folsom— Wow! What a terrific market! Ten sales in the first two days of the week is very good for the Folsom office. Every Agent is working with multiple buyers and the buyers seem to be qualified and ready to buy! Floor time is strong and opens are well attended. I think it’s a great time to buy real estate!
  • Rocklin/Lincoln—We have had several floor calls from prospects here for Easter. The Agents have been contacting past clients and have received several referrals. The Agent with the open house of over 150 people a couple of weeks ago has already received several referrals. The Agents are busy with buyers as the inventory is down.
  • Roseville-Granite Bay—We had the best traffic for 2009 last weekend. Looking forward to those REOs coming out. It seems that banks and the government are holding onto their REOs right now. California banks have repossessed over 80,000 homes and have not put them back on the market yet!
  • Sacramento Sierra Oaks—Sales inventory is the rise. We had 24 ratified offers this week! Open house traffic remains very busy. Inventory is very low.
  • Tahoe-Truckee Region—Inventory Summary: The listing inventory for the Tahoe-Truckee market increased by 48 new listings for the week bringing the total active listings to 2,019. Currently, there are 1,414 residential properties and 605 lots/land listed for sale. Of the active listings, there are 110 properties listed as short sales, (5.4%) and 52 properties listed as REO, (2.6%). There were nine new short sale properties listed last week. Based on the current inventory and sales year to date the market has roughly 12-months of inventory available. Sold Summary: On a year to date basis there have been 163 properties sold in the market as compared to 247 for the same period in 2008 which is 34.0% reduction in sales. For the week of March 30th to April 5th, there were 15 properties sold with ten (10) priced below $750,000 and five (5) priced above $750,000. Activity Summary: We held nine (9) open houses over the past weekend with minimal activity. One lakefront property listed at $3,500,000 had 15 groups visit the property which was clearly the most active. The Sales Associates are seeing increased buyer activity with multiple showings at all price points. There were twelve (12) showings on properties priced at $750,000 or higher and nine (9) showings on properties priced below $750,000. We had two properties go into escrow last week with the largest being $1,325,000. It is apparent that buyer interest and activity is picking up as there are continued great values in the market. Lake Tahoe and Truckee properties are priced well and present great opportunities for interested buyers. As the summer season approached, we are anticipating more and more buyer activity.
  • Vacaville/Fairfield— The market in Solano County is robust! Our inventory is down due to the lack of REO properties being released by the banks and our buyer activity is up! Most of the properties listed under $300,000 are receiving multiple offers and our Agents are coaching their buyers to be aggressive in their offers.

Now what should we do with these positive stories? Don’t look a gift horse in the mouth! Spread the word. One of the biggest challenges hindering our sector right now is low consumer confidence. We’ve just finished three years of a very gloomy and challenging time in United States real estate. And while this optimism can’t yet be explained by official statistics, which lag behind the current market by 30-60 days, pendings are up in many markets and units sold are certainly on the rise. It’s time to target our family, friends and clients alike and educate them on the opportunities and possibilities in today’s market. The time is right now. The market is poised for a rebound. With the $8,000 first time home buyer tax credit, the historically low interest rates, the high rate of affordability—we couldn’t be in a better position for a rebound. Read my lips: spread the word! Tell your friends. Tell your family. If you’re considering buying a home, now may just be the perfect time.

Next week I will be taking a brief hiatus from Weekly Market Watch. I’ll return the following week with another exciting, robust edition.


Have a great one,

Bob Bronswick
President
Coldwell Banker Residential Brokerage Sacramento/Tahoe

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