Archive for March, 2009

How to Love your Home when the Real Estate Market Doesn’t

Remember when we all thought our homes were all that and more? Back when all we had to do to feel good about our houses was to go to a website where they gave you free market analyses (and a virtual cookie to go!) just for showing up? And if we needed to feel really good, all we had to do was call an appraiser? This was back when people were pulling money out of their homes to buy cars and vacations with?

I don’t even have to mention that those days are long gone. They might be here again eventually – given enough time – because human beings have very short memories and economic cycles are cyclical. But for the short term anyway, that idyllic time is over. Virtual market analyses are just plain old depressing and the people that pulled money out of their homes to buy cars and now almost living in them! So how do you still love your home? How – knowing that the foreclosure next door has sold for a fraction of what you paid for your house – can you be satisfied and decide not to chuck it all up and leave?

Foreclosures & Short Sales have Serious Consequences

Remember when you were growing up and your friends asked you to do something silly and you did it, what did the adults around you say? So if he jumps off a bridge, you will, too? Of course not, you thought. Of course I wouldn’t. I’m not that silly. Well, unfortunately, jumping off bridges (metaphorically speaking of course) has become pretty common lately. This does not apply to those people that have seriously been duped by being given the wrong mortgage they didn’t understand and I’ve met them. There are those however that just want out of their home because it has lost value. Retirement funds and other funds including savings accounts intact. I’ve met these people as well. These are people who can make their mortgage payments, but just don’t want to. They didn’t buy a home, they bought a speculation and now that it’s lost value, they want out.

Foreclosures and short sales can leave serious blemishes on your credit history – results that can reverberate for years to come. And just because everyone else is doing it and it seems like times are tough economically, there is so much bad news out there and you seem to have a get out of jail free card, so to speak, doesn’t mean you should use it. You will still need somewhere to live. You still need credit. And decisions like short sales and letting a home get foreclosed on you can haunt you for a long time after this economy recovers. If you have other options, explore them first.

Mortgage Interest Deduction

Besides building long term wealth one mortgage payment at a time (especially if you are a landlord) your home helps you out financially at tax time with the mortgage interest deduction. Most homeowners can deduct their interest payments on their mortgage under itemized deductions. Property taxes are also deductible. Check with your individual tax planners but for most tax payers, the mortgage interest tax deduction is the largest single deduction on their income taxes. (There has lately been some talk at the California Association of Realtors® regarding this deduction and if there are changes, we will definitely mention them on this blog.)

Security Blanket

Perhaps the most overlooked part of a home in all this talk lately about falling home prices and so on is just the simple fact that your home is your security blanket. Most people don’t buy homes to invest in and while that may be a consideration it is not the premier reason for a house purchase. Most people buy homes to live in, a place to come to relax in after a hard day’s work, a place to have friends and family over and perhaps even a place to leave to their heirs.

And in this scheme of things, falling home prices don’t matter as much. It is important to remember the reasons for buying a home. Because unlike market values that can be measured every month with numbers that can turn someone blue in the face on the news, the personal value you have in a home can not be measured as easily and yet can rank higher in your mind.

So if you’re tired of seeing your house value fall, but are in it for the long term, turn off the television. Make those repairs, put in that baby gate at the top of the stairs, paint your bedroom a sunset pastel orange. You might not change its market value but you might just change how you feel about it and that might do. For now.

El Dorado Hills Real Estate Market Update: February 2009

After a prolific January, sales of real estate in El Dorado Hills hit a speed bump in February. A mere 26 homes sold this month, as compared with 29 last year at the same time. 14 foreclosures sold along with 4 short sales and 8 non-distressed homes. Foreclosure sales are up year over year by 100% short sales and non-distressed sales are down 20% and 53% respectively year over year. Total unit volume is down 10% for the same period.

Price data also suggests a general downward trend for February. Sold price per square foot fell 22% year over year. It is currently at $165.71 from a high of $212.83. Average sales price is down 25% from $602,290 to 453,294 year over year. Median sales price is also down 13% for the same period. It is currently at $417,500 from last year’s high of $480,000.

Inventory is at 7.6 months based on the last year of sales and 7.9 months based on the last six months of sales, showing the general slowing of the El Dorado Hills real estate market over the last few months.

Arden Arcade Real Estate Market Update: February 2009

The same number of homes that sold in January sold in February: 1658. The Arden Arcade real estate market seems not to change much month to month. But if you are considering buying a short sale, this might defnitely be the market for you. Unit volume is up year over year by 65%. 1237 foreclosures sold in the Arden Arcade area along with 175 short sales and 246 non-distressed homes. So 85% of homes sold here are now distress sales, which is never a good thing for home prices.

Average sold price per square foot is down 30% from a high of $162.17 to $113.57. The average sales price is down 34% year over year to rest at $180,757. Median price is also down 38% for the same period to $155,000.

Inventory is at 3.7 months based on the last 12 months of sales and 3.6 months based on the last six months of sales. Foreclosure inventory is at 1 month. Short sale inventory is going to take its sweet time drying up – in spite of its recent surge it is still at 20.5 and 17.5 months respectively.

Natomas Real Estate Market Update: February 2009

The focus of home buyers in Natomas has definitely been on the non-distressed homes for sale and the short sales. Surprising as it may be, the numbers last month seem to bear that out. Maybe the good foreclosures are gone? Only time will tell. For now, suffice it to say that the short sale inventory has shrunk about five months in the last few weeks with foreclosure inventory remaining the same. However, with 20.8 months of short sale inventory, the pain in the Natomas real estate market is not over.

Unit volume is up 56% year over year. 134 homes sold in the month of February 88% of which were distress sales: 102 foreclosures and 16 short sales closed escrow along with 16 non-distressed homes. And although home buyers might be beginning to lose interest in the foreclosures, they haven’t done so just yet. Foreclosure sales are up 64.5% year over year and short sales up a whopping 129% for the same period. Non-distressed sales are down 6%.

Average sold price per square foot is down 23% year over year. It is currently at $113.40 down from $146.56. The average sales price is down 31% for the same period, currently $199,161. Median price is at $200,000, down 25.3% year over year. The average home sold is also 10% smaller, so here the average price per square foot is the more accurate measure.

Inventory is at 3.9 months.

Elder Creek / Fruitridge Real Estate Market Update: February 2009

Is this the end? Or is this the end? How about now? Now? When it comes to the Fruitridge area, it seems hard to say. If we go by the unit volume numbers, sales definitely are up 150% year over year. A total of 105 homes sold this month, the majority of which were foreclosures. 93 in fact. 3 short sales and 9 non-distressed homes also sold. Of course, foreclosure sales took the cake for being 258% over last year’s foreclosure sales. Non-distressed property sales fell by 44% year over year.

Price data gives us no good news either. Average sold price per square foot fell by 48% year over year down to $68.03 from last February’s $130.95. Average sales price is down 45% for the same period from $142,108 to $77,784. Median sales price is down 56% from $136,250 to $60,000.

If that’s getting you hiding under the couch, here’s some good news: inventory is at 2.1 months based on the last year of sales and 1.8 months based on the last six months of sales. Foreclosure inventory is down to an unbelievable 0.8 and 0.6 months!

Home Buyers: Making the Move Easier (Part Three)

This is part three of a three part series on how to make a move into a new place easier. So far we have covered various ideas of getting to know your neighbors, joining a group, walking around downtown and so on. Today we’re going to conclude the series with some of my favorite tips. These are the tips I learned from moving four times in eight years. (Seriously, I’m done.)

Join the Local Library

The library is usually my first real connection with a neighborhood. In the past I have joked that it’s because if I don’t come back in three weeks at least someone will care and will come looking for me. But of course, that’s a joke. A library is a good place to join in your first few weeks. Usually, they verify you actually live in the home you say you do. So if you’re not getting mail there yet, you can take your mortgage statement or your loan documents like the HUD-1 to prove that you live there. The library is also free and if you have kids in your home it’s a great way to keep them occupied with something to do.

Another reason for heading to the library early in the move is that it has internet access before you might have it in your new home. Many people I know are lost without internet. I see the library as a place you get to connect – online, in the community, and so on. Local libraries are also places where local events are advertised, which is another good way to get your kids involved in activities in the new place.

Talk to the Grocery Clerks

If there’s something you need in your new neighborhood, another source of information is the nearest grocery store. Usually the best one for such a purpose is the neighborhood store. When we first moved to Pollock Pines, everyone we spoke with was very eager to tell us about where everything was in town. In fact, we eventually got so tired of it that we stopped telling people we were new. And that was just from talking to people at Safeway. Imagine if you were talking to someone at the neighborhood store. (Eventually the clerks at Safeway had to let us go because there were other people in line, but it is a small town, so they joined in as well!)

Identify a good source of information about where to get what and he’s worth his weight in gold. Also, nothing beats being recognised in a new neighborhood. It makes you feel like you belong, like you’ve lived there all your life. And that makes you feel pretty welcome in a place where you’ve just unpacked your boxes.

Offer to Help a Neighbor

As far as belonging to a place goes, nothing will make you feel more needed than just the plain old fashioned notion of helping someone out. It costs nothing and it can make you feel useful and connected. For example, if you see your next door neighbor working on something in the yard and know how to fix it, offer to help. Of course, this goes without saying to some helpful souls out there, but as a new homebuyer it can be an immense sense of relief and you can make some friends in the process.

Don’t Think it Will All Get Done Right Now!

Moving is a huge process. From personal experience, I’ve noticed that it is only after a year of living in a new home that you finally begin to settle down. For the first year, you mostly focus on getting things where they should go and the extra knick-knacks remain stowed away in some corner, still in boxes with the labeling on. Sometimes you find them in closets, hidden away and only saying “Den” or “Downstairs Bedroom.” Every home isn’t perfect. Well, let’s just say no home is perfect to the homebuyer. There have be repairs or remodeling to make it fit you. For example, our hallway closet was a mess until just last month when we put in new shelves and now I finally feel organized. And it’s been more than a year since we moved here.

Don’t think your life will be perfectly organized in the first few months of moving. Getting old things to fit into a new home can be hard. Sometimes you have to get the new home to fit you. This involves going through old stuff and getting rid of a lot. It can be unnerving and sometimes overwhelming. So don’t expect perfection right away.

Enjoy the Unfinished Parts of Living in a New Home

Remember the new home commercials? Where they show the happy homeowners sitting together sipping a glass of wine as unpacked labeled boxes lie around them? How can they be so happy you wonder when there is so much work to be done? So much stuff to put away? So many boxes to recycle? The secret is this: learn to live with it. Learn to enjoy it. If everything isn’t going to get done right away and life is going to be a little messy for a while, learn to enjoy it in spite of the “mess.”

This is the time to remember how excited you were with the idea of buying a new home and moving. try to recall that. And now you’re here. So enjoy being here. I think the problem a lot of the times is that we spend too much time wanting to be other than where we are. This is no more true than when we move into a new home. We miss the certainty of knowing where everything is, we spend way more time looking for cookware than actually cooking, and much more time looking for clothes than usual. Everything seems to be other than where it should be. Living out of boxes is hard and we can’t wait to have everything in its proper place and living an ordinary – even boring – life. But that’s the beauty of moving! It forces you to take a back seat for a while. And it can be enjoyable if you let it.

And that concludes our series on making the move into a new home easier. If you have experiences or tips regarding this, please write to us. And we’ll try and incorporate them into our posts. Happy Moving, new home buyers! Of course, if you would like to be a happy home buyer, our agents are only a phone call away!

Homebuyers: Making the Move Easier (Part 2)

This is part two of a three part series on making relocation or just a move into a new neighborhood easier on home buyers. You don’t have to relocate to feel displaced. When my husband and I moved into our second home together, even though the home was just two miles or so from the one before it, we felt like we had moved to another city. Every neighborhood can have its own culture, so to speak. And as a new home owner, it’s important that you are part of it. Here then we continue with what else you can do so as to be part of the new place without too much stress.

Talk to your Neighbors

The traditional image of neighbors coming over with food the day you move into the home is a good one. It shows that people care about you and that they understand you might not have time (or space, literally!) to cook in the midst of moving. Lately however there aren’t too many neighbors doing it. Perhaps they think it comes across as too nosy.

There’s nothing stopping you though! After you’ve done the unpacking – or even in the midst of it – feel free to get to know your new neighbors. Go over and say hello or just talk to them if they’re hanging out in the yard doing yard work. Everyone wants to know who the new neighbor is that just moved in to the empty house, so go over and introduce yourself. If you’re feeling shy, it’s also okay just to wave or smile and look friendly. Chances are they will head over to your house soon enough to get to know you.

Have a Yard Sale

I actually saw this done and thought it was brilliant. A new couple moved into our first neighborhood and held a yard sale a few days later. Not only did they get rid of a bunch of old things that no longer fit into the new home, they also hung out in their front yard all morning talking to their new neighbors. Later in the evening, those same neighbors came over for a block barbecue. This actually works pretty well with the reference to the above statement of being shy. No one is shy during a yard sale! When there are things to talk about and the sun is shining and you are in an open space, some lovely friendships can be created.

A word of caution, however regarding this: when you have the yard sale, don’t sell (or show) things that otherwise you would throw away. Pick the right items, not junk. Trying to sell your trash will make you seem “cheap” (for want of a better word) and even though they might appreciate your frugality, no one wants a neighbor with trash. Remember the idea of the yard sale is first to meet your neighbors and second to get rid of a few things, not the other way around.

Start (or Join) a Group

The internet is arguably the best thing that has happened for society. No matter where you are, you can find the closest grocery store, restaurants, coffee shops and so on. Not to mention social groups. As an example, when I had a baby, I was surprised at how lonely it seemed in the beginning. None of my friends had babies and I wasn’t working initially, so the world seemed to pass me by. I needed friends that were going through the same phase of life as I was. Finally, I thought it wouldn’t be such a bad idea to check for a playgroup online. Of course, a three month old couldn’t “play” but the group was as much for me as for her. Voila! Turns out it was a great idea – I have five new local friends that make me feel more rooted to this place than I ever did!

Of course, you don’t have to wait for a new group to be created. At the above mentioned yard sale, find out if there are HOA meetings you can attend. Most neighborhoods will have some sort of group for the maintenance and care of their homes and streets. That’s a great way to meet people. Or start your own! What do you care about? Or like to do? Start a group with your interests and you’ll find that there are others who share them.

Talk a Walk!

A great way to get to know your new neighborhood and get some exercise is on foot. You can walk around in the residential area, or you can head downtown. There’s always something going on in the downtown area and a little retail therapy never hurt anyone! Check out the local stores, museums and local goings-on. Downtown will also have flyers and other local posted events that you might be interested in being a part of. It’s a great way to get involved and be part of a larger community.

And who knows? Maybe this new community understands you in ways you’ve never thought about. When we moved out to country, we had no idea there was local homebrewing community and club for my husband, the beer craftsman. But apparently there is – and not just has his beer gotten better, so has our social life. Look around. You might just meet some people that share your interests and make wonderful friends!

Drive, drive, drive!

This might be the only time I tell you to get lost! Haha. Most cars today have GPS that get you from point A to point B with almost no trouble. A good idea however might be to turn that GPS off and just drive. Remember back when you liked to get lost? That way you could get home late? Why not try that? Get distracted. Allow yourself to ramble. Stop and smell the flowers (you can get as or as little literal about that as you like!) It might be the only way to learn new things about your neighborhood. You might end up discovering places you didn’t know existed.

Of course, when you feel you’ve had enough, that GPS might come in handy. Not bad, huh?

Settling into a new home can be hard, but if you throw down new roots quick the process becomes a lot easier and much more enjoyable. Come back to read part three of how you can make the move into a new area easier. This is only part two.

Antelope Real Estate Market Update: February 2009

The Antelope stampede seems to have moved away from foreclosures to short sales just recently. A total of 63 homes sold in this heavily favored buyer’s market where 93% of all sales are now distress sales. 40 foreclosures and 19 short sales closed escrow this month along with just 4 non-distressed homes. But short sales gained the most year over year: 375%! Foreclosure sales are up 8.1% which lead one to think that maybe the lenders are agreeing to more short sales now that the buyer’s market refuses to let up. Non-distressed home sales have suffered a decline of 71.4% year over year.

Average sold price per square foot is down 13.5% year over year. It is currently $122.29 down from $141.41. The average sales price tells the same story: down 20.2% for the same period, from a high of $247,913 to currently $197,919. Median sales price is at $196,000 – also down 20.3% from last year’s $246,000. But the average home sold was also 8% smaller this February, so the most accurate number here is the average sold price per square foot.

Inventory is at 3.6 months no matter how you look at it.

Orangevale Real Estate Market: February 2009

A total of 26 homes sold in Orangevale in February of this year: 15 foreclosure sales, 7 non-distressed and 4 short sales. While the majority of homes sold are still distressed properties, we do see a year over year increase in unit volume by 44.4%. Foreclosure sales are also up 87% and non-distressed sales are up 75%. The only group suffering a decline in sales are short sales: down by 33.3%.

Average sold price per square foot has not changed much since last month: it is currently $157.93, a decline of 21.2% year over year from a high of $200.53. We also see an average sales price decline of 18.7% for the same period to rest at $230,437. The average home in Orangevale would sell for $283,603 last year at the same time. The median sales price offers no hope either: it is currently at $199,500, a drop of 23% from last February’s $258,430.

Inventory in Orangevale is at 5.1 months (based on the last year of sales) and 5.8 months (based on the last six months of sales) pointing to a slowdown just recently in sales. We will have to see if this slowdown is a result of the winter months or will stick around through the summer.

Greenhaven Real Estate Market Update: February 2009

Sales are beginning to slow in the Pocket Area of Sacramento also known as Greenhaven. This is the 95831 zip code that has been relatively stable in the midst of foreclosures and dropping prices elsewhere in Sacramento county. For the longest time, it looked like Greenhaven could be amongst the first to recover. If so, February has been a pretty bad month.

A total of 13 homes sold in February – 5 foreclosure sales and 8 non-distressed homes – a unit volume decrease by 28% year over year. No short sales sold this month and Greenhaven has a pretty number of short sales: 32 to be exact.

Price data hasn’t changed much over the last month. Average sold price per square foot is $166.37 – a drop of 7.3% year over year. Average sales price is $319,900. That is also a drop of 4.6% year over year from a high of $335,333. Median sales price however is up 1.2% year over year! It is currently at $324,000 from $320,000.

Inventory is at 4.4 months based on the last year of sales and 5.4 months based on the last six months of sales, pointing to the slowing sales in the market.

Downtown Sacramento Real Estate Market Update: February 2009

The downtown Sacramento real estate market looks almost the same as it did last year at this time. Is that a good thing? Well, if you compare it with last month, the answer is yes! It’s nice to see some life in downtown Sacramento after an extended period of not much going on. A total of 8 homes sold here last month: 2 foreclosure sales, 1 short sale and 5 non-distressed homes closed escrow. While that is still a unit volume decline year over year of 11% it is just a difference of 1 non-distressed home sale.

Prices too don’t look as bad as they did last month. Current average sold price per square foot is $263.80 – that’s 16.6% lower than last February’s $316.24 but a huge jump up from last month’s $172.98. Average sales price is now at $405,000 – that came roaring back after January’s average of $258,000! It is still a year over year decline of 12% from $459,433. But lookey here: median sales price sees a year over year increase of 8.5% (yes, you read that right!) – currently at $385,250 from $355,000 last year. The current median price also looks way better than last month’s $208,500.

Inventory is at 5.7 months (based on the last 6 months of sales) and 7.1 months (based on the last 12 months of sales).

Homebuyers: Making the Move Easier (Part 1)

It isn’t easy adjusting to a new place. First, there’s the homebuyers remorse – the nagging feeling that you have paid too much for a home. (Which, by the way, it’s hard to have in today’s market and yet, reading and hearing constant bad news all around may not be helping your mental state as a new home buyer.)

Then there’s the fact that you have trouble sleeping in a new home. It doesn’t smell the same, when you open your eyes at night it doesn’t seem the same and so on. While physiologically getting used to a new home might take some work, there are a few things you can do to ease into it psychologically.

Decorate

Remember those commercials on television? The ones where there are unpacked boxes and the happy couple are sitting on the floor enjoying a glass of wine? Well, that almost never happens. Which is why it’s a good idea to do it. Take a breather. It’s never getting all done anyway. Take the time to plan out your home the way it will be. If you don’t have something or have to go get it, do it. If you want to paint the bedroom an outrageous color, do it.

A little displacement can go a long way in helping you create the home of your dreams. When you bought the home you adopted someone else’s idea of what would appeal to the largest number of people. Now is your chance to make it your own. Go ahead. Take a day out of unpacking to head out to Cost Plus and get that lamp or that rug if you think it fits perfectly. Make your new home uniquely your own. The benefits to your mood will be immense!

Fix up, don’t wait

Too many home buyers decide to wait a while before fixing up their new home. If you have bought it in a market like today chances are you have got a great deal but also that it needs work, especially if it is an REO. There is no advantage to waiting to settle into a home before fixing up what needs to be done. You might have a better feel for the light and the way it languishes around later in the evening in a certain spot, but that dripping faucet will drive you crazy by then. And so will the peeling paint in the bathroom.

Get the things that are driving you insane done right now. If your mind revolts at the broken crown molding, get it replaced. Doing your repairs right in the beginning – before you move in or settle in – makes a big difference in your attitude to a new place. And it might get rid of that buyer’s remorse!

Have a Housewarming

Yes, there are boxes lying around. Yes, the downstairs is a fixer. Yes, everything needs fixing. However, having a housewarming at this point is still a good idea. For one thing, now your friends know where you live. Believe it or not, just that one detail makes a world of a difference to your stress level. Also, now you can enlist their help unpacking if you want and if they’re willing.

Another advantage to a housewarming? You can invite your neighbors over and get to know them. A good idea is to either go over or just ask your title company to get you the addresses and names of people on your block. Then send them invitations well in advance. Introduce yourself and say you’re having a housewarming and would love to meet them. It’s a great way to get to know them. A word of warning: have food at the housewarming, but make sure it’s easy and prepared in advance. Or buy it from the deli. The last thing you want is to be running around trying to cook when you should be getting to meet people.

Landscape or at least buy Plants

Everyone knows the benefits of gardening. And, granted, so you don’t have time right now to get your hands dirty and spend hours in the sun enjoying yourself planting herbs and flowers. But it might not be such a bad idea to plan a garden. Or better yet just buy a few houseplants. The psychological difference you feel when something living and green is in the home is amazing. Try an easy plant at first like the philodendron – while many people like to buy homeowners orchids at housewarming,s those are not such good ideas because they are generally fussier plants that need a lot of light. Save the orchids for later, like a time when you know exactly where the light is in your home at different times of the day.

If your patio gets morning or late afternoon light, you could consider getting some potted plants. It’s a great way to freshen up the entryway and will lighten your mood to stare at some color as you bring boxes in and out. It’s also a great way to deliver a nice message to your neighbors that you care about your home. If the house you bought has been a foreclosure, they’ll be glad to know that people who care have entered their neighborhood again. A decorated patio with plants also reduces the risk your home will be vandalized – an important concern especially if it has been empty for a while before you bought it.

Get a Dog

If you’ve waited years to get a dog because you didn’t own a home of your own, now’s the time to get a dog. You can adopt one at the local animal shelter or you can buy one from the classifieds. Either way, now that the pet has room to run around and you don’t have to pay a pet deposit, it’s a good idea to get one. Nothing says “I’m home!” to an empty new home with unpacked boxes like a dog who will slobber all over you and bark with joy at your return.

If you’re not into dogs, cats make pretty good housepets too. But remember that a dog is more emotionally involved with you while a cat might care more about the house. Either way, pets are a great way to ground yourself to your place of living. They may also help ease you away from your stress of being in a new home. (And cats love playing in boxes!)

This is only part one of a three part series about settling into your new home, so check back for more. If you are surprised that the home you bought and were excited about buying suddenly seems to overwhelm you, don’t be worried. This is a normal reaction every home buyer has. And while moving can be a pretty jarring experience, it is also an opportunity to truly settle into a unique home that not just reflects your tastes and desires of what you want in the world but also is a complete extension of you. And that, after all, is the purpose of making the move easier on you, the homebuyer.

Land Park Real Estate Market Update: February 2009

As I struggle to spell “February” just right on this keyboard before a full cup of coffee, the real estate market in the Land Park area of Sacramento is showing some slow signs of recovery in prices. Unfortunately, when the rest of Sacramento is still declining, this recovery could either be short-lived or will translate in a unit volume decline locally as more buyers head to other parts to buy homes. That is potentially what we are seeing in Land Park.

Unit volume is down 46.2% year over year. Foreclosure sales are down 50% and so are non-distressed home sales. A total of 14 homes sold this month: 10 non-distressed coupled with 2 foreclosure sales and 2 short sales.

The average sold price per square foot is beginning to hover again around $270, which speaks of the stability of Land Park as a local real estate market. It dipped slightly over the last few months under that mark and is currently at $270.37. That is however a decline of 12% year over year from a high of $308.05. Average sales price is at $388,850 – also a decline of 14% year over year from $454,096 but looking better than last month’s $358,050. Median sales price tells the same story – it is currently at $367,500 which is better than last month’s $340,000 but still when compared with last year’s number at $404,400 has dropped 9.1%.

Inventory is at 3.8 months based on the last year of sales and 4.2 months based on the last six months of sales.

Rosemont Real Estate Market Update: February 2009

Homes in Rosemont continue to see high demand amidst low prices and foreclosures galore! A total of 49 units sold this month, an overall unit volume increase of 53.1% year over year. Almost 4 out of 5 sales are now distress sales. 36 foreclosures, 3 short sales and 10 non-distressed homes closed escrow this February. The 10 non-distressed homes show no change year over year, but foreclosure sales are up by 80% and short sales up by 50% for the same period.

Sold price per square foot is currently at $121.17 a drop of 21.7% year over year from its high of $153.93. Average sales price is also down 18% from $210,070 to $172,049. Median sales price is down 12% from its high of $204,500 last February to $179,900 this month.

Inventory is at 3.1 months no matter how you look at it, an indication of the strong demand for homes in Rosemont.

Fair Oaks Real Estate Market Update: February 2009

Sales of homes in Fair Oaks have been pretty slow this month. After the interest they saw in January, this month has definitely taken a dive. Just 16 homes sold this month and although February seems to be a slow month for local Sacramento markets, this one in Fair Oaks seemed slower than most.

Overall unit volume is down 20% year over year with 8 foreclosures, 2 short sales and 6 nondistressed homes closing escrow. Also, as compared with a year ago, the balance of sales has now shifted to distress sales. Last year at this time, we saw homes sales perfectly balanced between the two. Not so any more after nondistressed sales suffered a decline of 40% year over year.

Sold price per square foot is lower again, although it is now falling at a slower pace. Fair Oaks is currently at $148.41 – a decline of 18% year over year from a high of $181.16. Average sales price is down 25% year over year from $342,500. It is now $258,254. Median sales price is also down 25% for the same period; it is currently at $244,920 from $327,250. The average home sold was also 8% smaller than last year, so the most accurate measure here is the price per square foot.

Inventory is at 5.6 months based on the last 12 months of sales and 6.5 months based on the last six months.

El Dorado County Real Estate Market Update: February 2009

A total of 103 homes sold in the county of El Dorado this month. The majority, as everywhere else, were distress sales. 55 foreclosures (53.4% of the total real estate sales) sold along with 14 short sales (13.6% of all sales) and 34 nondistressed homes (33% of all sales). When we compare the total number of sales to last year at the same time, we see that unit volume is up by 9.6% – not bad in this market in El Dorado county.

The biggest increase year over year this time has been in foreclosure sales. Last month it was short sales. It’s interesting to note that different areas are behaving in completely different ways in this regard. Some areas like Folsom are beginning to prefer non-distressed sales over short sales and foreclosures and clearly El Dorado county is beginning to like its foreclosure sales. Sold foreclosures are up 83.3% year over year, short sales are up 27.3% year over year and non-distressed home sales are down – not surprisingly – 36% for the same period.

El Dorado county saw its first month on month increase in average sold price per square foot in a long time. Unfortunately it still seems to be a decline year over year by 17%. This month’s sold price per square foot at $165.25 is better than last month’s $160.70 but not as good as $199.05 a year ago. Average sales price has also tumbled 16% year over year to rest at $349,588 from a high of $416,868. Median sales price is now at $339,000 from a high of $382,000 for the same period. That is a drop of 11.3%.

Inventory in El Dorado county is at 7.4 months based on the last year of sales and 8 months based on the last 6 months of sales.

Elk Grove Real Estate Market Update: February 2009

I’ve never understood the phrase, “The more things change, the more they remain the same.” Maybe it comes into play in Elk Grove’s real estate market. Except they haven’t changed much from January to February at all. Distress sales remain high with foreclosure sales taking 74.5% of the market and short sales 13.8% of the market. The remaining 28 nondistressed sales take 11.7% of the sales pie. Foreclosure sales are up 64.8% year over year, nondistressed sales are down 12.5% and short sales are up a whopping 450% year over year!

Average sold price per square foot is now at $115.47 – that’s 19% lower year over year from $142.60. Average sales price is also down 21% year over year from $314,078 to $247,789. Median price is down to $230,000 from $297,080 – a fall of 22.6% for the same period.

Inventory is at 3.5 and 3.6 months based on the last 12 and 6 months of sales respectively.

Folsom Real Estate Market Update: February 2009

Rising real estate prices may have dampened home buyer’s hopes in Folsom. That’s right – you read that right. I did say “rising home prices.” But since there are still 106 short sales on the market that are getting absorbed at the slow rate of 8 short sales a month on average we can rein in some enthusiasm (I know, Folsom dwellers, I know!) and call it “prices that are not falling.”

Because they haven’t. In fact, we are seeing a year over year increase in home prices, not to mention month over month. The average sales price is up 0.8% year over year from $405,875 to $408,950. I know, it seems like a small amount until you see what it was last month: $357,374! The average price per square foot is also higher than last month’s $180.23. It is currently $188.46. This number, while 6.2% lower than last year gives Folsom dwellers some hope that their local real estate market might be on the road to recovery. Median sales price has also recovered 0.4% year over year to rest at $400,000 from $398,250.

But wait, I did mention that sales are down, didn’t I? Foreclosure sales are down 29% and short sales are down 25% year over year. Non-distressed properties are up 35% in sales. Non-distressed homes were also the majority of homes sold in Folsom this month – 63% of total sales, which is a reversal of last February’s sales chart which showed the majority of sold homes as distressed properties. Overall unit volume remains almost unchanged year over year. 49 homes sold this February as compared with 48 last February.

Inventory is at 4.8 months based on the last year of sales and 5.9 months based on the last 6 months of sales.

Sacramento County Real Estate Market Update: February 2009

What was true of real estate sales in January of this year is even truer in the shortest month of the year. February saw little change in the marketplace. 1658 total homes sold this month bringing the sales slghtly higher than January’s 1628. The huge majority of these sales were distress sales. 74.6% were foreclosure sales (1237), 10.6% were short sales (175) and the rest 14.8% were non-distressed. That’s a small minority of about 15% overall sales.

Year over year, foreclosures sales are not going down: 106% higher than last February. Short sales gained the most; they are 143% higher than they were last year and non-distressed sales fell by 26% year over year. Overall, total unit volume is 65% higher than it was last February.

That coupled with low inventory is the good news part of this post. Last month inventory was at 4 months and 3.7 months. This year, it’s even lower at 3.7 and 3.6 months depending on whether you are considering the last 12 months or 6 months respectively.

Foreclosure inventory is down further to 1.1 and 1 months.

But that’s all for the good news. In terms of prices, they’ve slipped once again, albeit not as far as last month. Average sold price per square foot is now at $113.57 almost the same as last month’s $114.86. This is however a 30% year over year from $162.17. Average sales price is now $180,757 – slightly lower than last month’s $182,761, but again 34% lower than last year’s $274,177. Median price is at $155,000 down from $160,000 last month and 38% lower than last year’s $249,950.

Last Minute Open House Tips

Let’s face it. There aren’t that many Open Houses held by Realtors® recently. With the amount of foreclosures on the market, bargain properties tend to sell quicker and more often than owner-occupied non-distressed sales. Foreclosures are priced at rock bottom, leading homebuyers away from turn-key properties to bank-owned real estate and short sales. Sometimes, these homes tend to get multiple offers and there is stiff competition, but no matter. Homebuyers are attracted to the wholesale market realizing that asking prices like these were unheard of just a few years ago. This has led to a decline in hope for the real estate market in general and Open Houses in particular.

However, this does not mean that as a seller you should shun Open Houses completely. Even though prices seem to be the focus in a home buyer’s mind, remember that the real concern always has and will be value. If you can show a potential homebuyer the value in your home not just by pricing it right but also by showing it to its full advantage on Open House day, you have a pretty good chance of getting that home sold. In an effort to showcase that value, here are some last minute tips for that fateful day.

Get that Litter Box Out!

Everyone (okay, almost everyone) loves a nice, fluffy cat. But the litter box can drive buyers away. Especially if it is found – as in most places – in the bathroom. Definitely clean it. Or better yet, get all cats out with their litter box for the length of a few hours. Bathrooms and kitchens still sell homes! Buyers like to imagine the bathroom as a spa, a place to relax. If they can’t get the stink out of their nose, they’ll leave in a hurry, leaving you with no chance to sell them your home.

Smell your Home!

All houses have a smell and the worst thing you can do is not notice that. You must ensure that your home smells clean as soon as someone steps in the door. And not just clean. It must be inviting and warm. This means no disinfectant smell – no one wants to buy a hospital – and no flowery spray that has homebuyers sneezing as soon as they enter. Light some candles if you have to. The smell of baking cookies is supposed to be fairly inviting and research suggests it creates an atmosphere of altruism. It might just make your homebuyers more willing to offer a better price!

Let there be Light!

Sunshine is a strong inducer of good feelings and a general sense of wellbeing. If you don’t believe me, just think of how many people feel blue in the winter. So don’t create that sense of foreboding and general depression in your home buyers. There are a million things to stress over when people are looking for a house, so don’t create an atmosphere that will encourage worrying. Open the curtains. Turn on lights – for once, don’t worry about energy savings. Light illuminates and highlights features in your home. Why hide them? This is the time to show off. Your home is on display. Make it feel like a well-lit museum!

Clear Clutter! (And Know where to Hide It)

This might not be a last minute rule because some people have a lot more clutter than they’re willing to admit. But assuming you have been getting rid of excess stuff from the very beginning, make sure that on Open House day things like extra kitchen appliances (yes, even the coffee grinder is an extra!) makeup, and so on are put away. Again, kitchens and bathrooms sell homes but those are also the two areas the most clutter is found. Sweep it all into a drawer if you have to at the last minute. But get it out of the way. The focus should be on the real estate you’re selling and clutter only distracts home buyers. Sure, they’ll probably clutter it up as soon as they buy the home and move in, but no one sells a home the way they live in it. If you think this is artifice, get used to it. No model really looks that way. And for the Open House your home is a model.

Highlight the Entrance to the House

This involves getting rid of all dying, dead or otherwise ugly plants, dirty welcome mats, shoes, cribs, toys, flip-flops, empty pots, gardening tools and whatever else you like to leave by the door in your daily life. The entrance to the home must welcome. Get a new mat if you have to and maybe some new plants. Turn on the porch lights. If you have a lit walkway to the home, turn those lights on as well. If you live in the country like I do it’s also a good idea to put a balloon on the mailbox and shine those house numbers. You want to guide and invite potential homebuyers and lead them through the door. It’s almost like you’re a tour guide without actually being there. If they mistakenly enter the neighbor’s house (like my guests sometimes do) because the entrance doesn’t tell them where to go, your Open House is already a failure. So lead and guide and ensure that along the way they notice all the great things about your garden, your driveway, your property.

Space Still Wins!

Remember how I mentioned value earlier? Sometimes the value homebuyers see is in spaces that the home sellers do not. And that is real estate blasphemy! Let me explain. If you have a patio, ensure that the home buyers see it. Don’t just assume they will read your mind. I mean, of course it’s a patio. Of course, they will see that they can have a barbecue here. And a little set. And sit and enjoy summers. No. You have to spell it out. Why not landscape it with some potted plants, set a patio set and an umbrella out and a few seats? Maybe they’ll actually linger there longer and see how they can use it. What this does is creates an illusion of added square footage. Even if the home is small and it has a great patio, the increased usable space will usually make homebuyers glad. And in California where the weather is great almost year round, they can see how the home can be a great place to live as well as entertain!

The one common thread through all these last minute Open House tips is this: above everything homebuyers must be able to picture themselves in your home. Your clutter, or an odd smell or too many appliances, dirt and so on are things that remind them that the home isn’t theirs. We like resale homes because they come in established communities but think of homebuyers who walk into new constructions. The idea that something has never been lived in has a certain charm to it. And while of course you can’t do anything short of build a new home to give them that, you can certainly create the illusion of a never lived in home by following these tips. Keep it clean, warm, friendly, spacious and inviting and you’ll soon be packing!

Recipe for a Real Estate Disaster Part 2

As I sit here snowed in from all the “rain” in Pollock Pines, I’m beginning to realize another essential element of real estate success. And therefore another ingredient which goes into a recipe for a real estate disaster:

Recipe for Disaster #4: Not Getting Educated

I’m not talking about a college education here, of course. I’m talking about getting all the information about investing in real estate before you do anything. Okay, maybe ALL the information might be a stretch. But you should be pretty well versed in the area, prices, days on market, the types of homes in the neighborhood and so on. If you’re a first time home buyer, you’re obviously in the right place. This blog has so much information on finding the right place, getting the right Realtor®, what happens during home shopping and how to write an offer, what to offer and so on that you’ll be hard pressed to find a better resource. Nonetheless, remember that finding a home is more work than you might think.

The recipe for disaster comes in when you ignore doing your homework and jump headlong into something for which you have no exit strategy. The world’s best businesspeople will tell you to think of an exit strategy before you get into anything. It seems like you are thinking in reverse, but that’s a good idea. Beginning with the end in mind is a good way to begin. Of course, if you’re buying a home to live in, this question becomes (mostly) irrelevant.

With Serin, he did I suppose learn a few tricks from the real estate coaches, but didn’t take an indepth enough approach to eventually do well. Which was what was required. He hopped around from one idea to the next (and one property to the next) – something that was sure to end in doomsday as it finally did.

Recipe for Disaster #5: Being too Public

Now I know most of the publicity in the Serin case came after he had already made a mess of his so called real estate investments, but I think there’s something to be learned from that too. The problem was that he kept wanting to milk his mistakes to the very end. He started a blog about what a mess he had made, so that others could learn from it. He started a book, appeared on the Dr. Phil show and various other places for interviews, thus costing him whatever sympathy he had managed to generate from people just reading his story in the newspapers.

The problem with being so public about your real estate investments is that you tend to begin to make decisions based on reactions. You begin to stop thinking logically and rationally and begin reacting. Believe it or not, there are people out there that will be either threatened or just plain envious of your success and create impediments. When I said earlier that you should talk to a varied enough audience about your real estate ideas, that has to be in moderation. Get too public and it can become a pretty big recipe for a huge real estate disaster.

Recipe for Disaster #6: Not Sticking with It!

Real estate is a very strong investment – whether you’re one of those buying it as a home you will live in or you’re going to buy the house and rent it out. However, it does require patience. Many of the real estate investors (and homeowners) I know believe that the first ten years of owning real estate is just the beginning. While you may have heard stories of overnight millionaires in real estate, the truth remains that those are few and far between and have had oodles and oodles of luck. The real real estate moguls always win by buying at the right time and waiting it out.

Serin didn’t wait for anything. He didn’t even pause to think. Even after he had a mistake and learned he had made many mistakes, if he had just held on a little longer and found a way to make it work, he would have been much happier. Unfortunately, when the market turns, not too many have the fortitude or the insight to be able to hold on to their properties until they start to turn a profit. Of course it goes without saying that some cash reserves help in this regard. This is where the getting educated part comes in. Now, some people would call this preparing for the worst case scenario and that might just be true. Get educated and then have the resources to wait it out. If you don’t, that’s a recipe for disaster as sure as can be!

Now, please remember that I am not bringing up Serin to bash him. I think there’s been enough of that. I think he made some unforgiving errors of judgment and then some more to follow them up with. The reason I’m writing this post is so that even in this market we don’t miss out on the lessons we should be learning from the mistakes in the past. Even if they are made by someone else, no one is immune to them. Avoid these pitfalls and avoid creating the perfect recipe for your own real estate disaster, lest you end up like Serin! Good luck!

Recipe for a Real Estate Disaster

The other day while reading some old posts, I came across the name Casey Serin and realized no one had mentioned him in the media for a long time. Remember the guy? He bought about a dozen houses (if I remember right) all over the United States and kept borrowing from one to pay off the other or credit cards. The idea was that he flip homes and keep going and eventually make a ton of money.

While this strategy may have worked in a better market, (there are those who have been immensely successful flipping homes for a profit. You have only to look at the presenter of “Property Ladder” – Kirsten Kemp.) However, I think it was more than a bad market that ruined him. I think in the end all of the homes have ended up foreclosed and Serin is in debt upwards of a million dollars. Very sad story, but I think there was no way it could have ended. It just had all the ingredients of a recipe for disaster. Want to avoid your own real estate disaster? Then read on.

Recipe for Disaster #1: Not Talking to a Varied Enough Crowd

Serin claims he learned all about real estate investing in the seminars real estate coaches hold in hotels conference rooms almost every month. I’m sure you’ve seen the advertising. “Come and learn how to make money in foreclosures!” “There’s a gold mine in real estate right now…. watch this free video and learn how to make it happen!” and so on. Full disclosure: I have attended some of these seminars myself. While I’m too cheap to go attend the weekend seminars which promise all the secrets as opposed to just the choice few the presenters give you to whet your appetite for the free ones, I must say I was also pretty put off by some of them.

But personal tastes (and gag reflexes) aside, some of these presenters and real estate coaches have some pretty good information. And – processed well – one could potentially do well under these ideas. However, I think it’s very immensely important to also cross check idealism with the real world. For example, if you have been in a room with salespeople all day, take a break and talk to some friends. Or ask a real estate professional if what the real estate coach says is even plausible. No joke: I once received an offer on a listing that was completely illegal to have written which included huge amounts of cash back to the buyer after closing that would never hit the HUD-1. The offeror’s name? John Doe. No lie. Of course it wasn’t his real name. I’m guessing he was copying it from a sample contract handed out by one of these “coaches.” Had he spoken with someone else besides just the “coach” he would have known this offer was illegal and the very least he could have done to lend himself some upfront credibility at least would have been to put his real name in the offer!

Recipe for Disaster #2: Not Knowing the Market

This might be the one thing that most home buyers who relocate find the most troubling. And it is a valid fear. When you don’t know the area you plan on moving to, you are bound to find some surprises along the way. And usually after you have bought the home. Or when you are in the throes of love on a home you have in escrow. That is a bad time to learn about the market.

Ideally, if you are buying real estate in an area you know nothing about, you would try to get as much information about the place as possible. If you intend to live in the area, the information would be of a different kind: Who are the neighbors? What are they like? What is the demographic? What jobs are available? Which is the closest store? And so on. If you intend investing in real estate in an area, the questions are completely different. These would involve questions like, how long homes take to sell? What listing strategy do agents use? What kind of homes are in the neighborhood? Would I be overbuilding and lose value if I put in granite? Are most homes fixers? And so on.

Serin made the cardinal error of just buying real estate willy-nilly all over the country with no awareness of the local real estate markets. No matter what anyone says, the fact is that all real estate is very, very local. So to become a real estate disaster, all you have to do is forget the old adage “location, location, location.”

Recipe for Disaster# 3: Doing too Much too Soon

Many of the real estate investors I know look like they spend their days doing nothing. One day, I will get a call from them saying they want to refinance a certain property. And then, months after, nothing. But somehow, they end up with a handful of properties that begin to look like gold. Years later, these same people that looked like armchair critics have a real estate portfolio that is the envy of beginners like me. What did I miss?

Without doubt, a lot of buying and holding of real estate is speculation. For speculation to work in your favor, you must know how to weigh options and think critically of houses before you buy them. Serin did none of this. If every house looks like it could make you money, you need to stop and breathe. Reconsider and set some criteria houses should follow for you to buy them. Decide on a number you would want a home to get you – either in rent or resale value. This studying and thinking require time. Real estate investing is not something to be rushed into and that’s exactly what he did. To avoid taking a loss on one home, Serin went and bought another one as the value of the first one dropped. When, really, he should have taken some time to relax and think about it.

Of course, this in no way ends the recipe for real estate disasters. Because there are more. Come back tomorrow to learn more of what not to do!