Some are calling it the sign that we have hit bottom and are on our way back up. Others are calling it a blip on the screen. Whatever your take, NAR released Thursday its existing home sales report which showed three key, positive indicators regarding the housing sector:
- For the third consecutive month, existing home sales rose
- Inventory is easing
- Home prices declined less sharply in June
The report noted, “Existing home sales…increased 3.6 percent to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.9 million-unit level in June 2008.
The report also revealed, “Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4 month supply at the current sales pace, down from a 9.8 month supply in May. Raw inventory totals are 14.9 percent below a year ago.”
The Wall Street Journal reported Thursday a look at 28 major real estate markets and where they are headed. The results (http://online.wsj.com/public/resources/documents/retro-HAGERTY.html) were interesting for Sacramento:
- A 43.3% decline in housing inventory (from a year ago)
- We are currently at a 2.7 month supply
- We’ve seen a 42% drop in price since the peak
What all of this leads us to believe is despite some of the challenges we continue to face nationally and globally, the domestic housing market continues to demonstrate signs of recovery. The temporary first-time home buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact.
Are we out of the woods yet? It’s tough to say but the signs are encouraging and three months of continued increases in home sales are a positive sign that we may be on the road to recovery.
And with that news in tow, let’s take a look at this week in real estate:
- Auburn—We’re still having appraisal issues. REOs and short sales are on the decline and listing inventory is decreasing.
- Dixon Davis—No Inventory!!! Lots of buyers and no houses. Short sales and REOs want cash or conventional, so the 90% of the buyers with VA or FHA miss out. More inventory would help these buyers out. But I'm sure this is everywhere.
- El Dorado Hills—Sales are ranging from $93,000 to around $550,00 the last few weeks with several under $300,000. Prices continue to decline in the million dollar plus range. Lots of multiple offers and appraisals are a challenge. One agent says if he just keeps his head down, keeps working, doesn’t look at the sales board and continues to work out the diverse escrow challenges, transactions are closing.
- Elk Grove Laguna—Until we see an uptick in listings, every buyer will be fighting for property. With that in mind, average sales price has not yet increased.
- Sacramento Fair Oaks—No information reported.
- Folsom—Good solid week but not crazy like the first week or so of the month! Decent week for closings, listings and sales but still fighting some “agent attitudes” that need improving!
- Sacramento Metro—Lots of buyers out there just waiting for bank approval on short sales.
- Sacramento Sierra Oaks—No information reported.
- Placerville—Inventory remains stable and we have a slight increase in sales activity. Very few REOs. However, the sun is shining and Placerville continues to be a gorgeous area with a lot of wonderful opportunities for the buyer looking for a lifestyle change. Very important to work with a local agent. The history and stories of this area are terrific.
Rocklin Lincoln—Still having appraisal issues and a very hard time with Ocwin. They do not return phone calls and they do not have utilities turned on in many cases. We had Rian from CAR political action at our meeting this week and it is very important that we respond to many of the bills that are being presented. - Roseville Granite Bay—Short sales are moving although still long timeframes. Still need REO inventory as buyers wait patiently. Appraisal issues continue with new HVCC codes.
- Tahoe/Truckee—Active Listings: The listing inventory for the Tahoe-Truckee market increased slightly last week to 2,378 active listings in the market - 1,695 residential properties and 683 lots/land listed for sale. REOs and Short Sales: Of the active listings, there are 149 properties listed as short sales, (6.3%) and 56 properties listed as REO sales, (2.4%). Overall, the Tahoe-Truckee market has less than 9% of its active inventory listed as a short sale or REO which is dramatically less than many markets outside of the area. Inventory: Based on the current inventory and sales year to date the market has roughly 22.6-months of inventory available. Sales Summary: Year-To-Date (YTD) Sold 2009 Vs 2008: On a YTD basis there have been 427 properties sold in the market as compared to 528 for the same period in 2008 which is (19.1%) reduction in sales. For properties sold YTD, 52 were REO’s, (12.2%), and 45 were Short Sales, (10.5%). For 2009, there have been 238 properties sold < $500,000, 143 properties sold between $500,000 and $1,000,000 and 46 properties sold > $1,000,000. Year-To-Date (YTD) Sales Prices 2009 Vs 2008: The median sales price for the properties sold YTD in 2009 is $460,000 while the average sale price is $572,036. For the same period in 2008, the median sales price was $515,000 and the average sales price was $722,601 which is an (10.7%) and (20.8%) reduction in price respectively. Last Week’s Closed Sales: For the week of July 13th to July 19th, there were 25 properties which closed in the market with seven (7) of those sold at a price above $750,000. This past week’s closing was up dramatically from the previous week. Pending Sales: Pending sales in the market decreased slightly to 160 which is slightly higher from the previous week. Of the pending sales, 29% are either a short sale or an REO property. Market Activity Summary: Open house activity was fairly light last week. Coldwell Banker held a moderate eight open houses with average to low traffic depending on the location. 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 48 homes in escrow which is 31% of the pending escrows. 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—At the risk of sounding like a broken record, our market activity is same stuff, different week. 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 coming in at value continue to be an issue. Numbers: Currently in Solano County there are: 749 active properties ~ 962 pending ~ 83 sold (7/16/09- 7/23/09) our absorption rate in Solano County for all price ranges is currently 1.4 months.
This week I’ll end with a few words of wisdom to our clients:
Pricing and presentation is vital in today’s market. Buyers are paying attention to new inventory and current price reductions so if you want your home to remain competitive in today’s market, you need to consider this fact. I urge you not to test the waters when you place your home on the market. You will prevail if you price your home competitively from the beginning and present it in its best light possible. Listen to your Agent! Once you do this, great opportunities abound.
Until next week,
Bob Bronswick
Coldwell Banker Residential Brokerage Sacramento/Tahoe
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