Archive for January, 2010

Elder Creek / Fruitridge Real Estate Market Update: December 2009

A huge drop in unit volume sales this month marks the possible recovery of the Fruitridge real estate market. Foreclosure sales have fallen 72.3% year over year and overall unit volume has dropped 50% for the same period. Inversely, short sales rose 50% and non-distressed sales 81.8% for the same period. While 2 out of 3 sold homes is still a distress sale, this landscape no doubt looks healthier than it did a year ago with 9 out of 10 home sales being distressed.

Average price per square foot rose 19.3% year over year from $75.59 to $90.21 as it inched toward that $100 mark. Average sales price is finally (again) in the six figures from $86,294 last December to currently $100,497. Median sales price is currently $95,000.

Overall inventory for the Fruitridge area is at 2.9 months based on the last year of sales and 3.3 months based on the last six months of sales. Foreclosure inventory is barely around half a month.

East Sacramento Real Estate Market Update: December 2009

26 homes sold in the East Sacramento area this last month, an overall unit volume dip year over year by about 13.3%. This dip has been largely the result of foreclosure sales dropping – just 8 REOs closed escrow in December as compared with 17 a year ago. Also, more than half of all sales – 53.8% are now non-distressed sales, a fact that is helping the price recovery in East Sacramento. Non-distressed sales rose by 40% year over year.

Prices have risen 36.2% year over year! No, that is not a typo. Average price per square foot has gone from $148.04 last December to $201.62 in December of 2009. East Sacramentans must have had a really jolly Christmas! Perhaps as a reaction to this price increase, homebuyers have purchased homes on average 8.5% smaller than they did last year at this time. Average sales price reflects that decrease in the size of the home, showing a 24.6% increase year over year from $175,992 to currently $219,298. Median sales price is now $239,500.

Inventory is at 3 months based on the last year of sales and 3.3 months based on the last six months of sales.

Rancho Cordova Real Estate Market Update: December 2009

Rancho Cordova has been another one of those places with large amounts of foreclosure inventory for sale in the last year. Now that those REOs are disappearing we are beginning to see the expected dip in sales. 19 homes sold this month in the area of which just 10 were distress sales – 6 foreclosures and 4 short sales. The rest 9 were non-distress sales, changing the real estate sales landscape quite drastically. Where last December 3 out of 4 sales were distressed, today the scales are more evenly balanced.

Unit volume fell by 26.9% overall, while foreclosure sales fell 57.1% and short sales fell 20% year over year. Non-distressed sales were up 28.6% for the same period.

Average price per square foot fell 5.8% year over year from a high of $120.54 to $113.50 currently. Average sales price is now $279,275 which is 6.2% lower than it was a year ago. Last December, it was $297,881. Median sales price currently rests at $278,682.

Rancho Cordova has 4.1 months of inventory based on the last year of sales and 4.2 months of inventory based on the last six months of sales. Foreclosure inventory is right around 1 month.

Orangevale Real Estate Market Update: December 2009

If it weren’t for the short sale inventory in Orangevale, the zip code of 95662 would be well on its way to recovery right now. December was an exceptionally good month for Orangevale given the current state of the market – unit volume increases and price increases along with low numbers of foreclosure sales were the hallmarks of December.

A total of 24 homes sold in the month of December in Orangevale, an overall unit volume increase year over year of 9.1%. Foreclosure sales dropped for the same period by 31.2% while short sales increased 100% and non-distressed property sales were also up by 125%.

As regards price, average price per square foot went up 1.6% year over year from $145.72 last December to $148.06 this December. Interestingly enough, homebuyers also bought homes on average 12.8% bigger year over year. This would explain the discrepancy of the average sale price being 14.7% higher than it was a year ago at $258,453. Median sales price is currently $209,500.

Inventory is at 4.4 months based on the last year of sales and 4.7 months based on the last 6 months of sales. Foreclosure inventory is around 1 month. Short sale inventory is at 11.4 months and 10.1 months respectively.

Galt Real Estate Market Update: December 2009

Although foreclosure sales have slowed down in Galt as elsewhere in Sacramento county, they remain the majority of homes sold. 52% of all homes sold in the Galt area are now foreclosures – a better percentage some would argue than a year ago when 3 out of 4 homes sold were foreclosures.

25 homes sold in the area in December – 13 of which were REOs, 8 were short sales and 4 were non-distressed sales. That’s a drop of 43.5% of foreclosure sales, a 60% increase in short sales and a 100% increase in non-distressed sales. Overall unit volume however fell by 16.7% year over year.

Average sold price per square foot is now $109.70 which is 13.6% under last December’s high of $127.01. Average sales price fell by 11.1% year over year from a high of $199,143 to $177,000 today. Median sales price is currently $155,000.

Inventory in Galt is now at 3.4 months based on the last year of sales and 3.9 months based on the last six months of sales. Foreclosure inventory is at 1.2 months and 1.5 months respectively.

Fair Oaks Real Estate Market Update: December 2009

The Fair Oaks real estate market suffered a bit of a lull in the month of December. Home sales were down as well as the prices. 36 homes sold in the month as compared with 39 a year ago at the same time. That was a 7.7% drop year over year. All categories suffered including foreclosure sales which fell 25% and non-distress sales which fell 5.3%year over year. Only short sales gained by 50% in sales.

Average price per square foot is now $143.77 which is 10.5% lower than it was a year ago. Last December it stood at a high of $160.72. Average sales price seems to have fallen by 17.2% but that is inaccurate as homebuyers bought homes on average 7.5% smaller than they did a year ago. (The more accurate number for price declines is this the average price per square foot.) Current average sales price is $253,442. Median price sits at $240,500.

Inventory is at 4.9 months based on the last twelve months of sales and 4.5 months based on the last six months of sales. Foreclosure inventory is around two and a half months.

Carmichael Real Estate Market Update: December 2009

Nothing much has changed in the Carmichael area in terms of real estate sales or prices year over year. In fact, almost the same number of homes sold at almost the same prices as last December. How’s that for stability? 32 homes sold in the 95608 zip code as compared with 33 last December. Of which, 10 were foreclosures, 3 were short sales and the rest were non-distressed homes. About 60% of all sales remain non-distressed.

Average price per square foot is currently $168.55 which is 3.8% lower than it was a year ago from a high of $175.21. Average sales price fell to $303,973 a seeming decline of 9.6% from $336,430 but that was because homebuyers also bought homes on average 6.1% smaller than a year ago, so the more accurate figure here is the average price per square foot. Median sales price is currently $251,750.

Inventory in Carmichael is at 5.6 months based on the last year of sales and 5.4 months based on the last six months of sales.

Antelope Real Estate Market Update: December 2009

As prices edge closer to the point at which they were a year ago with price declines at single digits, home sales are still falling in some areas. Homeowners in those areas are waiting for the sweet spot where prices stop falling and sales begin to level out. Clearly this has not happened in Antelope at this time.

Just 48 homes sold in the area, a 39.4% decline year over year. This decline was mainly because the glut of foreclosed homes is now receding and REO sales themselves declined by 72.2% year over year. So even with short sales gaining ground (25% increase) and non-distressed sales also increasing by 38.5% for the same period, overall unit volume was still down. Two-thirds of the homes are now distressed sales.

Average price per square foot is not $118.86 down 3.4% year over year from a high of $123.10. Average sales price fell 10.1% from $215,952 a year ago to $194,069 this December. Median sales price sits at $195,250.

Inventory in Antelope is at 4.2 months.

Elk Grove Real Estate Market Update: December 2009

240 homes sold in Elk Grove this past month, an overall unit volume decrease of 7% year over year. Foreclosures alone fell by 46.3% year over year from 190 sold last December to just 102 this month. Inversely, short sales rose by 113.5% for the same period and non-distressed property also saw an increase in sales by 90.3% year over year. The overall percentage of non-distressed sales has doubled year over year from 12% to 24.6% of all homes sold.

Average price per square foot is now $114.48 which is 4.7% under last December’s $120.11. Average sales price in Elk Grove is $247,753 – also a decrease of 4.9% year over year from a high of $260,538 last December. Median sales price now rests at $232,500, a decrease of 3.5% from a high of $241,000 in December of 2008.

Inventory in Elk Grove is now at 3.5 months based on the last year of sales and 3.6 months based on the last six months of sales. Foreclosure inventory still remains under a month.

Folsom Real Estate Market Update: December 2009

Even in the holiday season, Folsom posted more home sales in the month of December than it did in the previous month. 77 homes sold this month leading to an overall unit volume increase of 54% year over year. In fact, we saw increases in every category of real estate sales: foreclosure sales rose 5% short sales rose 157% and even non-distressed properties were 65.2% higher in sales than a year ago.

Part of the reason for all this homebuyer interest might be that Folsom has yet to post price increases like the rest of Sacramento county overall. Average price per square foot is currently $164.91 which is 9.7% lower than it was a year ago. Average sale price is also currently depressed at $350,048 – about 10.6% lower year over year. Median sales price is $348,000.

Inventory in Folsom is at 4.2 months based on the last year of sales and 3.9 months based on the last six months of sales. Foreclosure inventory is at a little under 2 months.

El Dorado County Real Estate Market Update: December 2009

El Dorado county seems to trail behind Sacramento county trends by as much as six months to a year as we have seen in the past. As such, for this market update as well we are seeing the same things we saw in Sacramento county a few months ago.

There has been buyer interest in short sales, as evidenced by the increase in short sales by 77.8% year over year and even though foreclosure sales are up their increase is a much smaller 4.8% year over year. Non-distressed sales have also gained ground – 56.4% increase for the same period – leading to an overall unit volume increase of 38.4%.

Average price per square foot fell by 9.1% year over year from a high of $167.17 to $151.95. Average sales price also fell by 8.7% for the same period from $368,912 to $336,868. Median sales price is now $282,000.

In spite of the interest in short sales, inventory for short sales remains high – right around 18 months. Overall inventory is at 7.5 months based on the last year of sales and 6.9 months based on the last six months of sales. Foreclosure inventory is at 1.9 months.

Sacramento County Real Estate Market Update: December 2009

Home prices are up year over year second month in a row! And look, I wasn’t here to report it on the third of the month, that is, as soon as I found out. But as John eloquently informed you, by copying an announcement from my Facebook page, I had a baby boy last month and am just now getting a handle on work around here. Therefore the long silence. Anyway, let’s back to real estate.

Every category but foreclosure sales gained in sales year over year. That includes short sales and non-distressed property. So the market might be limping toward some sort of a recovery after all. Foreclosure sales fell 54.2% year over year while short sales gained 89.5% and non-distressed homes also gained 62.6% for the same period. Overall unit volume fell by 19.1% with a total of 1548 homes sold in Sacramento county.

Average sold price per square foot is not at $122.94 which is 1.9% higher year over year and average sales price sits at $206,634 which is 7.2% higher than last December’s price of $192,829. Median sales price is now $180,000.

Sacramento county has 3.5 months of inventory based on real estate sales over the last year and 3.7 months of inventory based on sales of the last six months.

FHA Loans in Today’s Market

An FHA loan is a mortgage loan issued by the lenders approved by the Federal Housing Administration. A type of federal assistance, FHA insured loans lend lower income Americans and first time home buyers the opportunity to borrow money to buy a house they cannot afford otherwise. The aim of providing FHA loans is to make the home financing system stronger and stabilize the mortgage market. The FHA serves as an insurance company to lenders, thus minimizing the default risk for them.

Features of FHA Loans

  • The minimum credit score for an FHA mortgage is 620.  The interest rate depends on the buyer’s credit score.
  • The first-time home buyer should pay 3.5% down payment, besides the low FHA mortgage rate, which is actually much less compared to conventional loans. Even the down payment can come from a down payment assistance program or gifts from family or friends.
  • FHA loans allow for much more flexibility and thus are easier to qualify for than conventional loans.
  • FHA streamline is a program that helps FHA loan borrowers reduce their interest rates by refinancing, provided that they meet all the program requirements. In this program, buyers need not get into the hassle and expense of having an appraisal.

Qualifying for FHA Loans

The following requirements are essential to qualify for FHA loans:

  • Credit background: Having a decent credit background to show that you meet your obligations. You should have established credit to qualify for an FHA loan. This is essential to convince the lender that you have at least some history.
  • Income: Having sufficient steady income to pay off your monthly debt will mean that you would not default your payments. For this, you should be employed for two years, though not necessarily, with the same employer.
  • Debt to income ratio. ( Having reasonable debt to income ratios will help determine how much you can borrow. This is to ensure that the loan is not too much for you to bear. Therefore, they will figure out a reasonable monthly payment for you to pay, which is calculated as a modest percentage of the gross income.  Though there are exceptions to this rule (talk to your lender) FHA requires borrowers to pay not more than 31% of their gross income to the total housing cost, i.e., Principle, Interest, Tax, and Insurance (PITI).
  • Closing cost: Having enough cash at the time of closing will mean you can make your down payment. HUD regulates FHA closing costs and ensures that these do not go beyond the maximum fee limits for home buyers.
  • Bankruptcy: If you have a bankruptcy, to qualify for FHA loans, your state of bankruptcy must be at least two years old. Your records must state that your credit score has improved since then.

FHA Mortgage Insurance

FHA charges a fee from borrowers to insure the lenders and reduce their risk in case the former default a payment. Under FHA loans, home buyers must pay an upfront mortgage insurance premium and ongoing fee, besides their monthly payments. If the borrower defaults, the collected insurance premiums will be used to pay off the home loan.

FHA Closing Costs

According to FHA requirements, the borrower is entitled to pay some of the closing costs as charges while either the seller or lender will pay some others. These charges are deposit verification fees, attorney’s fees (outside of California), appraisal fee, inspection fees, document preparation, and many more. Closing costs are not considered in the calculation of mortgage amount or down payment.

FHA loans can be sought for various other reasons, besides purchasing a home, such as:

  • To repair or renovate their home
  • To make their home energy efficient

Other Funds

  • Gifts from a borrower’s relative, employer, charitable organization, or government assistance program are permissible as down payment.
  • Sale proceeds from the sale of an asset can be used for down payment, provided the required proofs are available.
  • Savings at home or mattress money is also an acceptable source of income, provided the money is first deposited in a financial organization at the time of payment. The lender has every right to question the source of that income.

FHA Loan Limit by County

Sacramento County   $580,00

Placer County           $580,000

El Dorado County       $580,000

FHA Home Loans Vs. Non-FHA Loans

FHA loans were designed as mortgage loans for the low income groups and first-time home buyers. These are limited in variety compared to non-FHA loans. Being conservative loans, these post the least risk to the lender unlike other non-FHA loans, where the lender is at a high risk. FHA mortgage insurance protects the lender in this case. Often FHA loans are the best option for first-time home buyers.