2007 November | Sacramento Real Estate

Archive for November, 2007

You Can Write Up a Short Sale (But Can you BUY One)?

The one and only Sacramento Real Estate Gal, Purva Brown, recently called my attention to some really important information for buyers about short sales — their abysmal closing rate.

Many readers of the blog will no doubt already know that a short sale is a sale where the seller has insufficient funds to pay off the loan(s) on the property, and has asked the lender to allow the sale to continue but approve a reduced pay-off instead of going through foreclosure. Like homes that are already owned by the bank (REOs), short sales are often discounted compared to other homes.

Unlike REO’s — however — there’s a problem. It’s harder to tell exactly where the problem is than it is to tell you the numbers. In Sacramento County, for example, as of late November, 2007 short sales accounted for 2,890 of the 11,053 active listings — 26.1%. At the same time, 16.8% of all listings marked pending sale (in escrow but not yet closed) were short sales. The pending sales data, moreover, may tend to underreport short sales, since many listing agents will continue to list the home as active until the lender has approved the sale — or even beyond this point. (Indeed, this practice is common enough that it’s become the subject of an MLS rule prohibiting the practice).

OK, so how many of these short sale transactions are closing? In October, the number was only 3.8% of sales — so far in November, that number has only risen to only 5.3%.

5.3% of sales, versus 16.8% of pending sales. In other words, two out of every three short sales transactions (or more) fail to close escrow.

Why the low numbers?

First of all, understand that the lender doesn’t have to approve the transaction. They can always foreclose.
Sometimes buyers find out in the process that short sales are not for them. When it takes a month or two or longer to get a short sale buyer, many’s the buyer (we’ve worked with some) who’ve simply lost patience or couldn’t wait because of their situation.
I’ve seen cases where short sales were listed where the buyer was not even behind in their payments. As a buyer, have your agent ask about the status of the seller. If they’re not behind in payments, and if there’s not an adequate hardship, the chances of the lender approving the transaction trail off to something pretty close to zero. Chances are that a large percentage of short sales shouldn’t even be listed.

Can you avoid the short sales and still get a bargain property? Absolutely! If you focus on the REOs — bank owned foreclosures — you’ll find homes that are typically priced below the short sales and are much easier to own. When you look at REOs, the number of homes that close compared to the number that are for sale is actually higher, not lower. For example, it’s not uncommon to see 12% REOs in inventory, but 25% in the sold statistics (about twice as many).

Open Houses in Sacramento – Will We Ever Get this Far?

An article in the Sacramento Bee this morning caught my eye. Apparently, there have been a few cases of women stealing things during an Open House of luxury homes. According to the Realtor who was holding the Open House, they looked like serious buyers. So now it’s getting to where they’re going to ask for picture IDs when someone walks into an Open House.

By the way, just what does a buyer look like? I’d like to know. In fact, I’d love to know. It would be a lot easier if people walked around with a little light flashing over their heads that said “buyer!”

Oh well, so much for my laziness in prospecting.

Here’s are some things you can do to help make sure your home doesn’t get burglarized during an Open House:

Make sure you put your jewelry and other valuables away under lock and key.
Make sure your agent walks with the person through the home.

And no, I can’t tell by looking at someone if they’re a buyer. I wish I could.

Things you can learn on a Doctor’s Visit

The other day I was over at the doctor’s for a routine check-up and they handed me a document that needed to be notarized. Curious, I opened it at the office. It was an advanced health care directive – with all kinds of unpleasant questions about what would happen if I was unconscious with no chance of recovering, whether I wanted to donate my organs at death, and so on. While I haven’t filled it in and handed it over yet, every time I look at it, I am reminded that sometimes things can go wrong and we must be prepared for them.

I wish we had the same when it came to real estate.

Most of the time, clients don’t even know how to hold title and the title company doesn’t even ask. They just assume that if you’re a couple, you want it joint. In fact, I’m convinced that they throw in “joint tenancy” without even asking.

But there are reasons in California for a married couple to insist on “community property with right of survivorship.” Read the California Association of Realtor’s advice about it here. And also, consider getting a power of attorney that kicks in if you’re unable to make decisions or sign your name, especially if you have a mortgage on the home.

And if you find this post just too grim after yesterday’s Cyber Monday, blame my doctor.

Happy Cyber Monday

As much as I sometimes think I’m hot stuff, with my 2003-vintage real estate blog, I don’t always keep up with life on the Internets as well as I should.

I only learned about Cyber Monday today, co-incidentally, on Cyber Monday, the first Monday after Thanksgiving. This is the online retailer equivalent of Black Friday, the day after Thanksgiving, so named because it is the busiest day for shopping and the day that retailers begin to run their business “in the black” for the year.

The reason cyber Monday takes place the next Monday is the same reason why Monday has always traditionally been our best day for people inquiring about homes, and our busiest web site traffic day. That reason is that people generally have faster Internet connections at home than at work, so when they go back to work on the Monday they can use the boss’s broadband connection to inquire about real estate, or to buy things on line, from places like (go figure), CyberMonday.com.

So there you have it. Happy Cyber Monday.

I hope your turkey was good. I spent the last four days reading science fiction and eating turkey. What a treat. Today my Realtor® on duty over the weekend called to tell me how busy it was over the weekend, with lots of inquiries and more showings than usual then, too.

So it looked like some of you couldn’t wait for Cyber Monday.

That works for me!

Home Shopping this Winter?

Traditionally, home shopping falls flat during the holidays. We slow down during Halloween and then Thanksgiving comes around and we hit a dead spot. This year however, I think business is going to continue, albeit at a slower pace.

If you’re considering buying a home this winter, count yourself among the lucky ones. Why?

1. Inventory is high – The number of foreclosures make for scary news for sellers because they have to compete with bank-owned homes and you, lucky buyer, have lots of homes to look at to find the perfect one! You can find a complete list of foreclosures in Sacramento county here.

2. There are no recreational sellers out there – During the big real estate boom, a lot of sellers wanted a certain amount for their home before they would sell their home. Today, if a home is on the market, chances are they want to sell and will do whatever it takes to negotiate a sale with you.

3. There are huge discounts in price – There was a time when homes had trouble appraising and hence getting a loan for the home was hard. Today, if you find a great deal, the appraisal might just come in 10% over the price you’re in escrow for. Congratulations – you just “made” 10% of the sales price by just buying the home!

So head out there and let the shopping begin. Remember, you don’t have to restrict yourself to just retail gifts this winter. Housing is selling at wholesale prices!

Three Things Your Agent Should Tell you About a Short Sale

Sometimes when I read the material on my colleagues’ web sites, I almost get the impression that the idea of doing a short sale — a sale where the lender approves a payoff amount less than the value of the loan — is being promoted to sellers almost as a normal sale.

It’s not. To be sure, if you simply can’t pay off your mortgage and are facing foreclosure anyway, a short sale may offer some advantages, the most important of which is that it may prevent non-purchase money lenders from getting a deficiency judgement against you (refinance or home equity lines of credit are typically non-purchase money and hence the lender has a deficiency judgement as one option in a foreclosure situation). But you should also be aware of these facts about a short sale.

You Will Be Asked to Show Hardship, and You Have to Tell the Truth
In order to approve a short sale, a lender has to believe that they’re not going to get their money any other way unless they do, and this typically means that you have to show that you can’t pay for some important reason — sickness, death of a spouse, loss of a job, or the like. Also, if you’re paying off a $100,000 loan and you have a six figure income and good credit, don’t expect the bank to welcome your request that they take a loss. So you’re going to have to show a hardship, and be aware: if you lie, that’s loan fraud.

Short sales will not “Save Your Credit” (At Least Not All of It)
If a Realtor® suggests that you can save your credit with a short sale, run, don’t walk. There is some debate over how much impact a short sale will have on your credit, and it also depends on how the bank reports it, some of which may be negotiable. However, in general you should only go through the short sale process as a last resort. Although a short sale may not impact your credit quite as much as a foreclosure, you should still expect to it to have a strong negative impact on your credit. Whether it’s “as bad” as a foreclosure or bankruptcy or “almost as bad” depends on who you ask.

Once the Short Sale is Over, You May Owe Taxes
There are two possible tax liabilities to a short sale. First, if the sale results in a gain in value of the property, you may need to pay capital gains tax, regardless of the value of the notes involved. Secondly, if the lender accepts less than full payment, the difference may be reported to the IRS as taxable income to you.

Sacramento Real Estate Market Update – Franklin / Freeport (95832)

One of the principles we’ve stressed over and over again here is that real estate is a very local phenomenon. For example, we’ve written several articles on East Sacramento, showing that while the rest of the county has suffered from falling prices and high inventory, East Sacramento has continued to enjoy a prosperous seller’s market.

Of course, if real estate is largely local, and there are communities that are “winners”, at the other end of the spectrum there are also communities that have suffered the most during the market downturn. The Franklin / Freeport area in South Sacramento (95832) is the area in Sacramento County that’s been hardest hit by foreclosures, so it’s no surprise that this area has also suffered greatly from rapidly declining prices and huge inventory surpluses.

The extent of the foreclosure problem in Franklin / Freeport is staggering. In October, five of the six homes that sold were bank foreclosures — 83.3%. In active inventory, the numbers are not much better. REOs account for 41.8% of active inventory, and short sales account for another 26.8% — add them up and you get just over two thirds of all homes currently for sale in this area are either owned by a bank or about to be.

With that many foreclosures flooding the market, the rest of the numbers are none-too-friendly if you’re a seller in this area. The sold price per square foot ratio has fallen 39% from October to October. The median price has fallen from $356,000 last October to $200,000 this October, a sobering 43.8%.

Admittedly, some of this is a trick of an extremely small sample size. When we look at sales for the first ten months of the year in 2006 versus 2007 we get what’s probably a more accurate picture. Still, even there we find a median drop of 19.1%, from $312,000 last year to $252,500 this year.

Thank your Realtor Weekend Begins!

While everyone else is bemoaning the housing market and saying how terrible their loans are, I’m introducing a thank your Realtor weekend for those of you that have made good purchases over the years with Realtors who did not put you in a house you couldn’t afford, or mortgage brokers who didn’t sell you loans that they knew would blow up in your face in a few years.

This Thanksgiving, I think it’s important to remember that there are some of us who are concerned about our clients, their needs, and not just about getting paid. Some of us are truly here to help you find the right home for your needs and really listen.

Be sure to thank those honest professionals this weekend. (And the best way to thank someone is to send them a referral.)

And have a very happy Thanksgiving!

Home in Foreclosure? Part 2

Okay, so hopefully you’ve called the mortgage company now and they’ve either said something like, “Yes, we’ll rewrite the loan with more favorable terms,” or they’e just flat out refused. The latter will most likely happen if the mortgage company is no longer in business.

If that happens, it’s time to move to the next step of the process, which is to call a Realtor. Well, call us.

What we would then proceed to do is check to see the market value of the property you are in. If you bought two years ago, the market value is probably lower than it was then. With your permission, we then contact the mortgage company and let them know that we are going to put this home up for short sale. This is especially important if your payments have been late or non-existent for more than a month.

Then, the house goes up for sale. Typically, the mortgage company will say nothing about whether they will accept the short sale or not until we get a written offer and send it to them.

Remember that a short sale is a very long, drawn out process that can be very frustrating, but sometimes it is the only alternative to foreclosure, which we will discuss in part three.

Sacramento County Foreclosures in Active Inventory

We’ve just updated the listing database that feed the specialized areas of our web site for foreclosures, new homes, and condos.

For some time now we’ve made available the number of active foreclosures by area in Sacramento County, but one thing I didn’t like about that list is that it only gives you raw numbers of foreclosures available, so naturally this is going to tend to show more foreclosures for areas where there are just more homes.

To give you a better idea of what the actual percentages are, I’ve put together the following table, which shows the percentages of bank-owned foreclosures in active inventory for different areas in Sacramento County. In other words, barring any possible data import errors, this is a rough guide to the number of unsold foreclosures as a percentage of all unsold homes for these areas in Sacramento County.

Percent Foreclosures	Zip Code	Area Name
31.3%	95832	Sacramento Franklin Freeport Vicinity
25.0%	95830	Sacramento Florin & Vicinity
23.8%	95660	North Highlands& Vicinity
23.8%	95823	Sacramento Franklin Freeport Vicinity
22.1%	95815	Sacramento Arden-Arcade Creek Vicinity
22.0%	95817	East Sacramento & Vicinity
21.8%	95828	Sacramento Florin & Vicinity
21.2%	95838	North Sacramento Natomas Del Paso Heights
21.1%	95690	Walnut Grove
20.8%	95842	Sacramento Foothill Farms
20.3%	95824	Sacramento Elder Creek Fruitridge
20.1%	95757	Elk Grove
20.0%	95639	Hood
18.9%	95827	Sacramento Rosemont College Greens Mayhew
18.7%	95820	Sacramento Elder Creek Fruitridge
18.3%	95626	Elverta
18.0%	95843	Sacramento Antelope
17.7%	95758	Elk Grove
17.5%	95673	Rio Linda
16.3%	95621	Citrus Heights
16.3%	95632	Galt
16.2%	95822	Sacramento South Land Park Greenhaven
15.8%	95670	Ranch Cordova Gold River
15.8%	95833	North Sacramento Natomas Del Paso Heights
15.5%	95835	North Sacramento Natomas Del Paso Heights
15.5%	95834	North Sacramento Natomas Del Paso Heights
15.4%	95841	Sacramento Arden Arcade Creek Vicinity
15.1%	95829	Sacramento Florin & Vicinity
14.9%	95624	Elk Grove
13.5%	95826	Sacramento Rosemont College Greens Mayhew
13.5%	95610	Citrus Heights
13.3%	95655	Mather
11.0%	95821	Sacramento Arden Arcade Creek Vicinity
10.9%	95662	Orangevale
9.3%	95825	Sacramento Arden Arcade Creek Vicinity
9.1%	95693	Wilton
8.8%	95628	Fair Oaks
8.3%	95742	Rancho Cordova
7.8%	95608	Carmichael
6.5%	95864	Sacramento Arden Arcade Creek Vicinity
6.2%	95683	Rancho Murieta
5.6%	95831	Sacramento So Land Park Greenhaven
4.4%	95630	Folsom & Vicinity
4.4%	95816	Sacramento Downtown Midtown
3.1%	95818	Sacramento Land Park Curtis Park
2.0%	95814	Sacramento Downtown Midtown
1.6%	95819	East Sacramento & Vicinity

Home in Forelosure?

Every time I get asked how business is this year, I have to add that I have actually turned away quite a bit of it. This surprises people. The fact is, there are so many houses in foreclosure, sometimes you really have to talk to clients and tell them that if you don’t have to sell your home right now, do not put in on the market. Hang on to it for a little while longer, if you can.

The sad part is some of them cannot. So what should you do if your home is in foreclosure or headed there?

For the first part, call the mortgage company. Don’t ignore the late notices – that is worst thing you can do. If there is no communication between them and you, the mortgage company has no choice but to foreclose. At the first sign that you sense financial distress, call the mortgage company and ask them if they would be willing to rewrite your loan, or restructure your loan.

They just might. Banks don’t really want your home unless you leave them no choice.

If that doesn’t work, call a Realtor for a potential short sale. More on that tomorrow. Today, call the mortgage company.

RESPA – The Real Estate Superfluous Procedures Act

One of the great things about real estate is that there are a host of consumer protection laws — mainly at the state and federal level — that we have to follow. However, one of the aspects of my job that bugs me is when it turns out that one of these laws is just superfluous smoke and mirrors.

According to web site of The US Department of Housing and Urban Development, HUD, which enforces the Real Estate Settlement and Procedures Act (RESPA) Section 9 of that law

…prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance.

Wow, if you’re a buyer, that sounds great, doesn’t it? You get to pick, period. Pretty clear cut and straightforward. Let’s go ahead and re-elect the lawmakers who wrote that, shall we?

So What’s Up in Sacramento County?

In Sacramento County, the tradition is that the seller picks the title company, and the reason given is that they pay for the CLTA (owner’s title policy). Any buyer getting financing, however, still needs to get — and generally, to pay for — an ALTA policy to protect the lender.

HUD’s position on this? According to a letter written by Rebecca Holtz, acting Director of Consumer Affairs for HUD, in a letter written in 2000 (regarding a similar situation, not Sacramento County specifically, but the shoe fits):

In summary, the Department [HUD] will not enforce Section 9 of RESPA against a seller who selects the title insurance policy if the seller is paying for the owner’s title insurance policy, and does not require the buyer to use the title insurance company for the simultaneously issued lender’s policy.

(A huge thank you to Judy Benton at CAR Legal for forwarding this along.)

OK, so far so good, right? The seller’s paying for CLTA, so no skin off the buyer’s nose there. The buyer can buy the ALTA policy from a different company, right?

Wrong. Take the case of Placer Title for the purchase of a $380,000 home. A CLTA policy costs $1,584.00. The ALTA Policy costs $585.20, if it’s issued concurrently. What does an independent ALTA title insurance policy cost?

I spoke to Placer Title: they don’t have pricing for that, because it wouldn’t make sense to do it. But to give you a rough idea, the ALTA policy on a refinance loan of $380,000 would be $1,008.00.

So, according to HUD logic, the seller can’t “directly or indirectly” require you to use a certain title company, but “directly or indirectly” doesn’t include requiring that you either use their company or pay significantly more to go elsewhere.

Oh well, at least if there’s a major hurricane you can count on the government to fly water and supplies in and not hang around on vacation. Right?

Oh, wait…

Real Estate, Realtors Getting Technologically Savvy

Yes, nowadays most Realtors have blogs. We also just type up offers on WinForms and email them immediately to our clients in pdf format. We’ve learned to use websites to promote our listings and order flyers online. We make a huge effort to draw people to our website, blending traditional methods like yard signs and Open Houses and online marketing. Some clients can even sign electronically if they’re away from home.

Now it looks like companies we do business with are catching on. The lockbox is going high-tech. According to the Sacramento Bee, the lockbox Realtors use to enter a home is now going to have a panic button that will send a message to five people the Realtor chooses, just in case he/she feels in danger. I must admit, I have often worried about going into a home alone with someone I do not know.

The lockbox, which contains the key to the home, already has the ability to tell the listing agent that the home has been shown, but GE – the maker of the lockbox – plans on adding new features soon. These will include information about the home, perhaps instructions such as “Don’t let the cat out!” (a familiar one!) and better ability to communicate with the other agent. This might just come in handy when clients see a home they haven’t made an appointment to go inside. If the lockbox tells me it’s vacant and it’s okay for me to enter and show it, it would save me the time of going back to the computer and checking the showing instructions.

All I can say is I’m looking forward to the changes.

Sacramento Home Buyers Must Have Questions…

… and we’re here to answer them. 312 of them, to be exact.

I’m working on getting 312 questions every home buyer must have when they make the momentous decision to buy a home. Burning questions such as “How does the overall process of buying a home work?” and “Why do I need title insurance?” and also “How many homes should I look at before deciding?”

Really I’m learning these questions from my own clients. Sometimes we get so used to the process of selling real estate that we throw out acronyms and then realize three sentences later that what we said made no sense to our clients. So I’m working on this “project” and will tackle one questions every time I write.

Check back often to see the answers. By the way, if there’s anything I have not answered, feel free to email me at purvabrown@msn.com or just comment. I’ll be sure to add it to my list, which as of today is sitting at 97.

Antelope Foreclosures Account for Nearly Half of Sales

Purva recently wrote some excellent advice for home sellers in Natomas, and nearby Antelope home sellers. Based on October’s real estate statistics, I would suggest that nearby Antelope sellers also need to seriously consider how competitive their home is compared to the many foreclosures that are on the market.

In October, bank owned foreclosures (also called REOs for “real estate owned”) accounted for fully 47.5% of sales in Antelope (95843). In October of 2006, none of the forty-six homes that sold were REOs. In October of 2007, forty units sold and nineteen of them were REOs (hence 47.5%). As in other areas, foreclosures outsold non-foreclosed properties by almost two to one. Even though they accounted for just under half of sales, REOs constitute just over one quarter (25.7%) of the inventory.

Moreover, Antelope is no exception to the general rule we’ve that the more foreclosures there are in an area, the more prices tend to plummet. The median sale price in Antelope dropped 20.6% in October from the previous year, from $350,750 last year to $278,350 this year. The average sale price dropped 23.6% during this time, from $360,437 last October to $275,350 this October. Average sold price per square foot dropped off somewhat less, since this year’s average home was somewhat smaller. The decline in price per square foot was 18.8%, from $206.44 last year to $167.69 last year.

Currently Antelope has 12.03 months of inventory.

But Aren’t Foreclosed Properties Sold “As-Is?” Why Are They So Popular?

That one’s easy. Looking at what’s currently on the market in Antelope, here’s how the sold prices per square feet break down:

REO’s are listed on average for $163.19 per square foot.

Non-REOs are listed on average for $183.49 per square foot.

On a 1650 square foot home (which is about average), the difference in price works out, rounding off a bit, to $269,000 versus $303,000. $34,000. Ten per cent.

Buyers aren’t stupid. $34,000 buys a lot of paint and carpet.

Elite Properties Is Hiring

Are you a real estate agent in El Dorado, Amador, Placer, or El Dorado County with one or more years of experience, or more than four closed transactions? Do you believe in doing a great job for your clients, and not giving up a lot of money to your broker? Are you interested in working for a company who can really help you grow your online business, not just pay lip service to it by giving you an Internet lead once every fifteen months or so?

If so, Elite Properties would very much like the opportunity to talk with you. For the past five years, John Lockwood, Elite Properties’ broker, has been steadily building up our Internet market share. As a result, we currently get lots of inquiries from buyers and sellers from the more than 3,000 unique visitors who visit our web sites every day.

We need help working with these clients, and we also need independent producers who bring their own strong prospecting skills or who want to grow their Internet marketing skills in cooperation with a broker who is very strong in this area. If you’re paying too much for online marketing, we can probably help in that area as well. We welcome individuals as well as teams.

We offer extremely competitive splits, and colleagues who are high on integrity and work ethic, and low on maintenance.

Remember:

If the Internet wasn’t where the transactions are, you’d be reading a newspaper right now, not a web site.
If your broker had better online marketing than me, you’d be reading him right now, not me.

For a confidential interview, please call John Lockwood at (530) 672-9160.

Natomas Homesellers Face Competition from Banks, Builders

If you are a private individual seller anywhere in the 95835 (Natomas) area, my heart goes out to you. I’ve been working with a client looking for homes in the area and in spite of having gone out to look at homes over three times this month, all we’ve seen are bank foreclosures and new home builders. There was a total of one home that fit the client’s criteria which was being sold by a private party, that is, not a bank or a home builder. It was not, however, on the client’s short list.

It’s not that I cherry-picked the bank-owned homes, it’s just that the prices are so much more competitive. These are well-maintained, upgraded homes with granite counters, hardwood floors and wonderful landscaping – 3 bedrooms, 2 baths and two stories priced at around $300,000. They don’t discount the fees of the co-operating broker and are easy to show because they are vacant. The buyer can look at the home without feeling like he is invading someone’s space. Compare that with the private sellers’ homes where you almost always have to call and make an appointment, the seller’s things are lying around, personal tastes get in the way of a buying experience and to add to that, the homes are priced higher than the bank-owned homes.

So if you’re a seller, keep in mind the stiff competition. Do everything you can to make sure the home is easy to show and looks fabulous at all times. This might include staging the home, lighting candles to make sure it smells divine (candles that smell like cookies are best!) and, of course, PRICE IT RIGHT. You have competition from banks and builders, so make sure your Realtor shows you those prices as well. A premium fee to the co-operating broker also does not hurt.

If your competition is doing it, you should try and overreach to get your home sold.

Watching “Closing Escrow: A Comedy about Real Estate”

Much against the wishes of my husband, who probably hears more about real estate and Realtors than he would rather, we watched this movie. The trailer seemed funny, so I got my hands on it last weekend at Amazon.

If you’ve had any experience buying a house with a Realtor, you might not find it funny. We come out amazingly normal and sane after anyone watches this movie. But if you are a Realtor or have experience working with one, this might provide some comic relief. I think this movie might be funnier for Realtors than their clients.

But then again, any movie that makes us look sane is worth watching.

Folsom Real Estate Market

Our cavalcade of October market data continues now as we look at the real estate market for Folsom for October 2007. The big story for Folsom in October was the huge difference in unit volume from October 2006 to October 2007. Last year 84 units sold in Folsom, while this year the number was only 46, a 45.2% drop in volume.

The average home sold in Folsom in October for $448,433, down 13.9% from last year’s average of $520,638. On average, however, this year’s home was somewhat smaller than last year. As a result, sold price per square foot dropped less dramatically. Last October it was $241.60, whereas this October it’s $217.16, a 10.1% drop. The median selling price of a home in Folsom fell 8.8% during this period, from $465,424 last October to $424,500 this October.

The number of foreclosures is fairly low in Folsom compared to other areas in Sacramento County, with five bank owned properties selling in October and making up 10.9% of the sales. In active inventory, there are 28 bank owned properties out of a total of 422 homes, or 6.6%.

If unit volume was down in October (and yes, it was), you can’t prove this by looking at inventory numbers. Inventory is 6.2 months in Folsom, which in the seller’s market side of the ledger, but only barely.

Fair Oaks Home Prices and Market Statistics

The Fair Oaks real estate market did better than Sacramento County in general in October, 2007. The average home sold in Fair Oaks in October for $413,430, down only 4.8% from last year’s average of $434,290. And though this year’s home was larger, bringing the average sold price per square foot down 10.8% from last year, October’s median sale price in Fair Oaks declined only 2.4% from October to October, with the median selling price at $415,000 last October and at $405,000 this October.

Compared to the rest of Sacramento County, Fair Oaks also has lower inventory. With county-wide inventory levels approaching one year overall, Fair Oaks enjoys only 7.82 months of inventory. Unit volume this year was better than last year in Fair Oaks, with 29 units selling this year, a 7.4% increase over last year’s 27 units. Also encouraging is the fact that fewer homes expired this year. Together, these two trends have brought the expired to sold ratio down quite nicely. It was 111.1% last year, but this year it was only 69.0%.

Average days on market are up somewhat, from 58 to 63, and foreclosures are also up, from 0% of sold inventory in October 2006 to 24.1% in October 2007.

RELATED LINKS

Browse Fair Oaks Condos

Browse Fair Oaks Single Family Homes

Interactive Fair Oaks Real Estate Map

Fair Oaks Foreclosures

East Sacramento Real Estate Market

Unlike the rest of the world, East Sacramento didn’t get the memo from the Sacramento Bee about how awful the real estate market is, and continued to enjoy a strong buyer’s market in October. Price movement can go either way depending on what indicator you like, while days on market decreased from October to October. Unit volume is down quite a bit, however, so let’s do the bad news first: This October twelve units sold in East Sacramento (95819), down 47.8% from last October’s volume of twenty-three units.

October’s average home sold for $522,467, down 10.7% from last year’s average of $584,926. However, since this year’s home was somewhat smaller than last year’s on average, the sold price per square foot ratio only fell 2.8% during this time. Meantime, the median price rose 9.3%. This year the median sale price was $497,500, compared to $455,000 last year.

The big news about East Sac continues to be the low inventory numbers. There are currently 3.25 months of inventory in East Sacramento. This is based on an average of twenty-units selling every month over the last year, with seventy-tow units in inventory at present.

East Sacramento is also the land that Notices of Default forgot, with only one bank owned foreclosure in active inventory (1.4%). None of the homes that sold in October of 2006 or 2007 were bank owned.

New Features Coming Soon!

We’ve been talking lately about making this blog more interesting and readable. And while we’re brainstorming about what we can add to make it so, I’d like to ask the question: Is there anything specific you would like to read about?

Sometimes because we’re focused on selling houses and inventory, market reports and so on, we tend to forget what gets read – in other words, we tend to focus on what we find interesting as opposed to what you the reader might see as good information.

So, let’s just put it out there: what would you like to read?

Let us know and we will do our best to respond.

This Weekend’s Walk For Hunger

Don’t forget!

The El Dorado County Food Bank’s Walk for Hunger is this Saturday, November 10th, 2007, so if you come out and walk I may see you there! There’s still time to sponsor me and check out whether my official sponsorship site will let us go past the goal of $200.00. Don’t let the fact that I’ve reached my goal stop you — you don’t have to let Laurie Mindnich hog all the glory and the credit.

RELATED READING

A Huge Thank You to Laurie Mindnich

Walk For Hunger, Matching Funds Available

Rancho Cordova Real Estate Market

The other day we looked at the real estate market in Gold River, a popular subdivision in Rancho Cordova (95670 — see area map).

Today we take a look at the Rancho Cordova community to the south and west, Rancho Cordova 95742 (area map of 95742). In this article, we’ll be dealing with Rancho Cordova numbers strictly for this zip code, for October 2007 versus October 2006.

Only seven homes sold in Rancho Cordova in October, and on average, only seven homes sold per month during the last year. Thus, the 142 units in inventory currently make up a very large number indeed in terms of unsold inventory: 20.3 months.

The average home sold in Rancho Cordova in October for $305,812, down 9.5% from last year’s average of $337,769. With this year’s 1931 square foot home being 7.1% larger than the average last year, the average sold price per square foot dropped from $187.34 last year to $158.37 this year, a 15.5% decrease. The median selling price in October was $305,000, down 9.9% from last year’s median of $338,331.

Of the 142 homes currently in inventory, fifteen, or 10.6%, are foreclosures.

Huge Price Reduction on 3400 Fort Jim Road

We’ve just had a big price reduction on this beautiful 4 bedroom, 2 bath home in Placerville, California. This home sits on four acres of pine forest, and the back yard is the perfect place to enjoy this serenity from the huge deck surrounding a beautiful pool. The inside has many upgrades and is impeccably maintained, so it shows like a model home. We have the video and the online flyer below. To schedule a showing, call John Lockwood at (530) 672-9160 or Vicki Agregado-Babcock at (530) 409-1100.

Beautiful Four Bedroom Home With Pool on Acreage

Location: Pleasant Valley

This is a beautiful home on picturesque acreage. Plenty of room for a growing family or for vacation home with 1950 square feet and four bedrooms. Back yard features pool, a seasonal creek, and a large deck, with low maintenance landscaping and the smell of pines. Open floor plan with bright and lovely kitchen and a pantry. Plenty of parking and room for a boat or RV, etc. Large master bedroom with walk-in closet. Minutes from downtown and highway 50. Must see inside to appreciate.

Information

Contact Information

John Lockwood

(530) 672-9160

Contact Reply Form

Forward to a Friend

View Other Flyers

Pricing

Asking Price: $349,900.00

Property Location

3400 Fort Jim Road
Placerville, CA 95667
View Map

Links

View Details

Features

Bedrooms: 4

Bathrooms: 2

Parking: Ample

Year Built: 1999

Lot Size: 3.856

Garage Size: None

School District: Placerville Union

Square Footage: 1950

Agent Name: John Lockwood

Broker: Elite Properties

MLS #: 70087796

Attributes

Appliances

Range/Oven

Dishwasher

Sink Disposal

Satellite

Interior Amenities

Kitchen Island

Wood Stove

Pantry

Exterior Amenities

Swimming Pool

Secluded setting

Large Front and Rear Decks

Low Maintenance Landscaping

Photo Gallery

View as Slideshow View Photo Gallery (11 Photos)

Equal Housing Opportunity

VFLYER ID: 1243384

Why do I Need a Realtor?

True story.

I’m working with some friends of mine on the purchase of their first home and I’m very excited about their decision. Buying in this market affords them opportunties unheard of in the last few years. While we were getting them preapproved however, they came across a FSBO (for sale by owner, for those of you that haven’t learned Realtor-Speak yet) through their family. So they told me that they would go check it out and would want to be represented anyway in the event that they liked it.

Now I’m not a big fan of FSBOs. And it goes beyond just the fact that there’s the possibility of not getting paid or the absolute insult that we Realtors are not needed in such a momentous thing as selling a house! No. The problem I have with FSBOs is that there is no one counseling the seller about how much the home is really worth.

Therein lies the rub.

Back to the story – my friends sent me the address to the property they were considering, and I pulled up comps (comparable properties that have sold in the last six months within a mile radius) in the area that related to the home. As it turns out, what the seller was asking was completely off the charts. He was following the classic FSBO example stated very eloquently by Tom Hopkins:

3 GIGOs + 1 SWG = 1 OPT

In other words, 3 garbage in garbage outs plus 1 scientific wild guess equals 1 overpriced turkey.

The seller here had obviously called a few neighbors that had lied about how much their homes had sold for (or that they had sold at all), added his own scientific wild guess and come up with the overpriced turkey of a house! But wait, it doesn’t end here. As if the house wasn’t overpriced enough at 15% over market, he added another 10% to the price before the clients (my friends) left the home that evening.

A broker from my past and a very smart man once said, “Realtors are not there to make flyers for you. Anyone can make flyers! Realtors are there to educate you on the market and counsel you through the sale (purchase) of your home.”

You better believe it.

Gold River Real Estate

Gold River, California is an upscale neighborhood / subdivision in Rancho Cordova (95670). Wikipedia says it’s often “mistakenly” considered part of Rancho Cordova, but given that the County of Sacramento doesn’t list it as a separate community, I think I’ll have to defer to the county on this one. (Someone let Andrew Keen know that Wikipedia was wrong again.)

Gold River real estate provides another excellent example and case study of the fact that real estate is a highly local phenomenon, since many of its numbers are atypical for Sacramento County.

For example, recently I reported that overall in Sacramento County in October, just over one third of the homes that sold were bank owned. In Gold River, in contrast, none of the homes sold in October were bank owned. In fact, no foreclosures have sold all year in Gold River, or last year either. However there are two foreclosures currently in inventory — this is 5% of the inventory, compared to approximately 20% of the active inventory county-wide.

No doubt in part because sellers don’t have to compete with banks, Gold River has kept its value fairly well during 2007. In the first ten months of 2007, seventy-one units sold in Gold River, down only 6.6% from the first ten months of 2006. Gold River homes lost only 6.6% of their value (sold price per square foot). The median sale price in Gold River dropped from $537,500 in Jan-Oct 2006, to $499,000 during the same period in 2007, a decrease of 7.2%. The average selling price fell 4.4%, from $545,041 in 2006 to $521,156. Unlike the rest of the county, where the average discount from the list price is approximately 4%, the average discount from list price in Gold River was only 2.4%.

Compared to the rest of Sacramento county, Gold River is getting through the downturn in the market rather well.

Here are currently available Gold River homes. If you have any questions about these listings, let us know!

Sacramento Foreclosure Auction Coming

A colleague of mine recently published an article critical of foreclosure auctions, saying that the tendency of buyers is to overpay at them, and banks know this. I don’t have any data on that to report one way or another, but whether you love them or hate them, Hudson and Marshall are holding another Sacramento Foreclosure Auction on Sunday, November 18th at 1:00 PM at the Radisson Hotel at 500 Leisure Lane in Sacramento.

You can also bid on properties online before the auction. (Legal disclaimer: I’m not advising you to do that or saying you’re going to get a “good deal” or anything of the kind — right now I’m wearing my blogger hat, and I’m not your agent.)

On the other hand, if you’d like to secure an agent to help you identify which of these properties are good ones, preview them, and assist you with the bidding process so 1) you don’t overpay and 2) you have your own agent rather than the bank’s agent to help you with the inspections and paperwork, give me a call at (530) 672-9160 and I’d be happy to help you with it as a buyer’s agent.

Even if you don’t hire us to work on it, I’m thinking I might go to the auction and report back. Maybe I can get Purva to go as well, but she may have family coming to town.

Foreclosure auction party?

Some people will take any excuse to throw a party.

Let’s hope there will be dip. I like dip.

Sacramento Real Estate Market, October 2007

Trick or treat.

As I prepare my report on Sacramento County’s real estate market for October, 2007, I recall my happy youth watching The Flintstones. You remember Fred and the gang. From the town of bedrock, he’s a page right out of history.

One great cartoon gag from the the Flintstones — though surely it has roots all the way back to the Manichean cartoons of the third century — were the Fred Flintstone as devil / Fred Flintstone as angel that would sometimes perch on Fred’s shoulders, whispering instructions.

Sometimes Gazoo would whisper the instructions.

Bloggers, Find Your Voice (From Among Those You Hear in Your Head)

In my case it’s the eternal angelic optimist, Purva Brown, on one shoulder versus the pitchfork-armed bubblers on the other.

Bubbler pokes me with pitchfork: In terms of unit volume, October was the second worst month in recorded MLS memory. 803 units sold in Sacramento County in October.

Purva flaps angel wings: C’mon, John, that MLS data only goes back to October, 2004, so all you have to compare it to are good times. Plus, October’s volume was an increase of 11.7% over September! Look on the bright side, will you.

OK, you two. Behave. Fight it out between yourselves. Let my shoulders be your last battleground.

The Rest of the Numbers

The median price of a home in Sacramento has fallen to $300,000 in October, down 14.3% from last October’s median of $349,900, and 24.9% from their peak of $399,499 of November, 2005. Average sold price per square foot was approximately $189.32 in October, down 18.2% from last October’s $231.23, and down 25.5% from the peak of $254.10 (September, 2005). (Purva: That’s not fair, John — you keep making the houses lose 1/4 of the value by picking high peak values from different months. What are you, some kind of bubble blogger now? ). The average home sold for $327,719 in Sacramento County in October, down 14.9% from last year’s average of $385,233.

Recently we reported that about a quarter of the homes selling in Sacramento County were foreclosures (REOs). The numbers have now risen to slightly more than one third. More precisely, of the 803 units that sold in October, 285 (35.5%) were REOs. Now you bubblers might think you could get an even 50% if you throw in the short sales, but you can’t, because only 31 short sales sold during this period, so the overall total ends up being about 39.4%.

Inventory is 11.61 months for Sacramento County overall.