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
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