“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