Now that school is almost out, we’re finding many families are starting to look at homes in anticipation of getting settled prior to next school year. Showing activity, in many markets, has increased considerably.
Sellers are now getting their homes on the market and, in general, seem to be quite knowledgeable regarding staging and pricing. The homes in the entry-level market, for th most part, are moving well if they are in good condition and fairly and competitively priced. Several Agents whose clients’ listings are in the entry level market are reporting that they have had buyers lose out on homes in bidding wars. Could they be back? The competition for well priced homes in good condition is heating up and we are seeing multiple offer situations in most of our first time home buyer markets.
Though we have seen sporadic increases in the upper end market, it is still relatively slow on showings and closings but we do anticipate that that sector will loosen somewhat if the economic news continues to show some stabilization and an upswing.
Before I get into the week’s top news, what I would like to share is that LORE Magazine and The Wall Street Journal this week released their Top 400 list. You may view it online at http://online.wsj.com/ad/top400-articlecontinued.html. Many of our own Coldwell Banker Residential Brokerage colleagues we’re recognized within this coveted ranking and for that—along with all of their hard work and dedication—I salute them.
The most notable news this week was The Mortgage Bankers Association’s (MBA) release of is Weekly Mortgage Applications Survey for the week ending May 29, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 658.7, a decrease of 16.2 percent on a seasonally adjusted basis from 786.0 one week earlier but was 14.4% higher than the same week a year ago. This increase is due, largely in part to the first time home buyer market which, as we know, has been vastly stimulated by a triple threat combination of low interest rates, the $8,000 first time home buyer tax credit and increased affordability. Together these incentives are finally getting buyers in the first time home buyer market off the fence and into the market which—once we get through the large number of REOs on the market—we should finally start to see some price stabilization.
But for those of you who are waiting for your homes to come back to their pre-recession values, be prepared to wait. A recent study that I read notes that real estate is now as affordable as its has been in the past 38 years (this of course relates to median homes when compared to median mortgage rates and incomes).
The fact is, the peak of unaffordability was in 2006, when an average family in the United States needed to spend 44% of their income to purchase an average single family home. Today, housing affordability in the United States is up to 73%. This means 73% of all new and existing homes sold in the first quarter of 2009 were affordable to families earning the national median income of $64,000.
A couple of other interesting articles of note this week:
- RISMedia’s First Time Home Buyers Grabbing Houses and Tax Credit (http://rismedia.com/2009-06-03/first-time-home-buyers-grabbing-houses-and-tax-credit/)
- Realty Times Multifamily Builder Confidence Up From Record Lows; Interest From Prospective Renters and Buyers Rises (http://realtytimes.com/rtpages/20090603_confidenceup.htm)
- Realtor.org Pending Home Sales Up For Three Months in a Row (http://www.realtor.org/press_room/news_releases/2009/06/phs_up)
Now, let’s take a look at this week in real estate:
- Auburn—No information reported.
- Dixon/Davis—Very very low inventory. Agents are working hard on short sales and waiting for more REO listings to come on the market.
- El Dorado Hills—Inventory is stable with closings ranging from around $120,500 to $850,000. Most new sales are ranging in the $200,000 to $500,000 range. Lots of multiple offers in that range. We have buyers coming in from out of the area. Some first timers and some who have been waiting out the market the last year or two.
- Elk Grove/Laguna—While the number of opens is a bit on the low side, the traffic counts remain high. Double digit traffic in all cases. Still the market driver on REO and short sales. The numbers of pendings have slowed due to lack of inventory and increased interest rates. Everyone, Agents and buyers, are waiting to see how the Tsunami of foreclosures will affect our market.
- Folsom—We’re finely getting quite a few listings this week, most were in the $400,000 - $500,000 range. 11 closings for the week was very strong for us. It’s a great market!
- Placerville—Appraisals are still an issue and we’ve seen a few sellers get “seller’s remorse” because they can’t find a new home to move to after their home is in escrow. Lots of really good land deals in desirable areas. Very few REOs or short sales.
- Rocklin/Lincoln—No information reported.
- Roseville/Granite Bay—We are looking for opportunities everywhere. Listing inventory and sales inventory is steady while short sales activity continues to bring in multiple offers.
- Sacramento Fair Oaks—The local market of Fair Oaks and Carmichael, Orangevale and Citrus Heights has been increasing in sales and new listings. My Agents are really energized and are working extremely hard. The Agents that do not work short sales or REOs are doing very well working off of past clients, both sellers and buyers.
- Sacramento Metro—No information reported.
- Sacramento Sierra Oaks—The inventory is very low. Most of our business is REO and short sale.
- Tahoe/Truckee—Inventory Summary: The listing inventory for the Tahoe-Truckee market currently stands at 2,152 active listings in the market - 1,532 residential properties and 620 lots/land listed for sale. Of the active listings, there are 128 properties listed as short sales which increased slightly, (5.9%) and 61 properties listed as REO sales, (2.8%). Based on the current inventory and sales year to date the market has roughly 8-months of inventory available. Sold Summary: On a year to date basis there have been 287 properties sold in the market as compared to 390 for the same period in 2008 which is (26.4%) reduction in sales. The median sales price for the properties sold YTD in 2009 is $450,000 while the average sale price is $575,558. For the same period in 2008, the median sales price was $511,150 and the average sales price was $720,726 which is a (12.0%) and (20.1%) reduction in price respectively. For the week of May 25th to 31st, there were 21 properties sold in the market with five above $750,000. Pending sales in the market remained constant at 140. Activity Summary: Open house activity for the past week was slow given the unseasonable rainy weather and the post Memorial Day weekend. Additionally, with graduation weekends occurring, visitor travel slowed. Sales Associates are seeing increased buyer activity and more and more are writing offers than in the previous six-months. Coldwell Banker currently has over 35 homes in escrow and are seeing many offers on our listings.
- Vacaville/Fairfield—Same story…we have buyers, now all we need is inventory. This week we have had three failed sales due to appraisal issues. Each were “regular” sellers and we just could not get the value on the properties so therefore buyer/seller killed the deal.
I’d like to leave you with this. It is an excerpt of an article I found online that I think really should get us all thinking. As I visit our offices, what I hear from most is that things are changing and I think many of us agree—at least as far as the housing market is concerned—it seems we are on the path to recovery. Having said that, there are some buyers and sellers out there who continue to wait. For those of you (and you know who you are), please read on:
“…If you're a buyer, buy because you love what you're buying. Buy because the lifestyle you're looking to live can more easily be accomplished with the purchase than without. If you're selling, sell because you want to sell. Sell because you need to sell. Sell because your neighbor is driving you crazy. Sell because the house you've always had your eye on just hit the market. Sell to move up in the market. Sell to downsize. Sell to liquidate, but if you really want to sell, just sell already. If you're waiting to sell until markets rebound, please realize that doesn't mean to list in October. That means you'll be listing several years down the road, and the reason you were planning on selling in the first place might not exist at that magical time in the future. None of us are promised today, let alone tomorrow. Let alone 6 years from now when you can possibly sell your home for 15% more money.
If you're in no hurry to sell, do your neighbors a favor and take your home off the open market. If you're wanting to sell, be realistic in your asking price and aggressive in your hunt for a buyer. If you're a buyer, John Burns seems to be telling you that it's a pretty good time to buy. I'm telling you it's a good time to buy, and my reasons are not the same as Mr. Burns'. Buy because you want to. Buy because you can. Buy because you know the purchase will make you look like a real estate savant 15 years from now. Welcome to 2009 and the new rules of real estate. Sell low, hopefully buy lower.”
And with that, I’ll bid you adieux.
Until next week,
Make it a great one,
Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe
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