Archive for August, 2010

New SAR Fund Helps Energy Efficient Upgrades

With this year’s summer being so much cooler than the previous Sacramento summers, you might not notice that you need more energy efficient appliances and windows but homebuyers of older Sacramento homes just might. Luckily for them (and homes built before 1978) there is help. The Sacramento Association of Realtors hoping to fix the reluctance of homebuyers from buying older homes has started a program funded with $234,000 to give qualified homebuyers $2,000 to make energy-efficiency improvements. While making these improvements can sometimes cost more than that amount, it can be a good place to start for many homebuyers.

About 6 in 10 homes currently on the market are estimated to be built before 1978. This program would also cover many on the foreclosures that are currently on the market for sale.

Some qualifiers: Homebuyers must use a SAR Realtor or lender, so the homes must be located in an area that a SAR Realtor or lender is qualified to sell or get a mortgage. The homebuyers must also get an FHA (Federal Home Administration) or VA (Veterans Administration) Energy Efficient Mortgage. These mortgages allow homebuyers to borrow up to 5% to make energy efficiency upgrades. These can include adding insulation, dual paned windows or new air-conditioning to an older home. The costs are rolled into the mortgage. The SAR program requires that a SMUD-certified contractor do the work.

This might just help clean up that short sale and foreclosure inventory, or at least help provide an incentive to many homebuyers who are relatively short on cash after buying a home.

Greenhaven Real Estate Market Update: July 2010

24 homes sold in the Greenhaven area in the last month of July. This is an overall unit volume drop of 20% year over year, consistent with the volume drop the last time we checked in November of 2009. Of the 24 homes sold, the majority (but just barely) were non-distressed sales. The rest 6 were foreclosure sales and 5 were short sales. Sales dropped 38% year over year for non-distressed homes and 14.3% for foreclosure sales. Short sales were up from 2 last year at this time to 5.

Average sold price per square foot is currently $154.32. This is up 9% year over year from $169.66 last July. Homebuyers preferred smaller homes by far this July with the average home sold sized down to 1738 from 1978 last year. Average sales price fell correspondingly to $268,277 from $335,676 last July. That’s a drop of 20.1% year over year. Median sales price currently rests at $250,000 a fall of 25% for the same period.

Real estate inventory in Greenhaven is at 6.5 months based on the last year of sales and 6 months based on the last six months of sales.

East Sacramento Real Estate Market Update: July 2010

More price stability but lesser people shopping for a home. As elsewhere in Sacramento county, the same mantra is true for East Sacramento as well. Just 30 homes sold in the East Sac area, an overall unit volume decrease of 34.8% year over year. The most marked change was in the category of foreclosure sales which fell by 50% year over year followed by non-distressed sales which fell 36.4% for the same period. Short sales remained fairly stable.

Not only were home buyers not looking a lot, the closed escrows seem to suggest that they were also interested in smaller homes. The average home sold in East Sacramento was 11.1% smaller this July than last July. This fact is reflected in the average sales price which fell 7.8% year over year from a high of $290,946 to rest at $268,335. The more accurate figure is the average price per square foot which rose 3.8% year over year from $212.07 to $220.07. Median sales price fell 2.7% for the same period. It is currently $253,000.

East Sacramento is just shy of 6 months of real estate inventory.

Carmichael Real Estate Market Update: July 2010

As Sacramento home owners wait for a recovery, even a leveling off seems like good news lately. And if you own a home in Carmichael, you should be breathing a sigh of relief. We’re of course not over the real estate slump yet, but there seems to be some sort of end in sight, at least locally. Everything could change if the market does not absorb the short sales currently listed, but at least for now it seems like the long road to recovery has begun, even though it might be uphill.

53 homes sold this last month in Carmichael, almost the same number as last July when 55 homes had sold – that’s a unit volume drop of 3.6% year over year. Foreclosure sales fell 38% while the number of short sales doubled. Non-distressed sales remained almost the same. 64% of all homes sold are now non-distressed as compared with just 56% last year at this time.

Average price per square foot is now $171.24 – an increase year over year of 6.8%. Last July, it was $160.38. Average sales price rose 21.9% year over year – however homebuyers also bought homes on average 14% bigger, so keep in mind that the average price per square foot is the more accurate figure here. Average sales price in Carmichael is currently $339,313. Median sales price rose 14.2% and currently rests at $265,000.

Inventory in Carmichael is currently at 5.1 months.

Land Park Real Estate Market Update: July 2010

Most homebuyers will agree that Land Park is a real estate market all unto its own. It does follow the general trend of Sacramento county but it is unique in its reluctance to absorb short sales month after month, year after year. This July, the decline in sales has been quite drastic and not just including short sales.

Real estate property sales dipped 51.9% in Land Park, with foreclosures dropping 75% and non-distressed sales falling 47.8% year over year. No short sales sold, as with last July. Overall, just 13 homes closed escrow – 12 non-distressed and 1 foreclosure sale.

Average sold price per square foot remained amazingly level. Currently $251.39 it fell just 2.3% year over year from a high of $257.41. Homebuyers however picked out bigger homes and bought on average homes 18% larger this July than they had last July. This affected average sales price which rose 15.3% year over year from $384,867 to $443,615. The more accurate figure here is of course the average price per square foot. Median sales price also rose this month, albeit at a smaller percentage of 8.1% from $370,000 to rest at $400,000.

Land Park currently has 8.2 months of inventory based on the last year of sales.

Federal Reserve Announces Final Rules for Mortgage Borrowers’ Protection

The Federal Reserve Board announced final rules to protect homebuyers needing mortgages to be able to purchase a house from unfair, abusive, or deceptive lending practices that can arise from loan originator compensation practices. These newly released rules apply to mortgage brokers and the companies that employ them, as well as mortgage loan officers employed by depository institutions and other lenders.

Today, lenders commonly pay loan originators more compensation if the borrower accepts an interest rate higher than the rate required by the lender (referred to as a “yield spread premium”). Under the new rule, the loan originator is not allowed to receive any payment that is based on the interest rate or other loan terms. This will prevent loan originators from increasing their own compensation by raising the consumers’ loan costs, such as by increasing the interest rate or points. However, loan originators can continue to receive compensation that is based on a percentage of the loan amount, which is a common practice.

The new rule also prohibits a loan originator that receives compensation directly from the consumer from also receiving compensation from the lender or another party. In consumer testing, the Board found that consumers generally are not aware of the payments lenders make to loan originators and how those payments can affect the consumer’s total loan cost. The new rule seeks to ensure that consumers who agree to pay the originator directly do not also pay the originator indirectly through a higher interest rate, thereby paying more in total compensation than they realize.

Additionally, the final rule prohibits loan originators from directing or “steering” a consumer to accept a mortgage loan that is not in the consumer’s interest in order to increase the originator’s compensation. The rule will preserve consumer choice by ensuring that consumers can choose from loan options that include the loan with the lowest rate and the loan with the least amount of points and origination fees, rather than the loans that maximize the originator’s compensation.

The final rules are effective April 1, 2011. You can find the entire Final Rules Highlights Document here.

Antelope Real Estate Market Update: July 2010

The last time we looked at the real estate market in Antelope in April of this year, the market didn’t look much different from this month. 59 homes have sold in the month of July, an overall unit volume decline of 21.3% year over year. Foreclosure sales alone fell 28.6%. There have been falling sales in all categories we track including short sales (which fell 5.9%) and non-distressed sales as well (which fell 18.8%) year over year.

The overall ratio of distressed sales to non-distressed has not change dramatically year over year. Approximately 4 out of 5 homes sold continue to be distress sales in the area of Antelope, the zip code of 95843 in Sacramento county.

Average sold price per square foot is now $111.14 which is 4.5% lower than it was a year ago. Last July, it was at a high of $116.43. Average sales price has risen since we last took a a look at Antelope. However, it is still 3.5% lower than it was last July when it was $202,764. Currently, it is $195,621. Median sales price rose 1.5% for the same period from $197,100 to a high of $200,000.

Inventory has fallen since we last looked to 4.3 months based on the last year of sales.

Elk Grove Real Estate Market Update: July 2010

219 homes sold in the city of Elk Grove this last month, an overall unit volume decrease of 17% year over year. Foreclosure sales alone fell 41% while non-distressed sales declined 8.2% year over year making this one of the slowest years in real estate sales. Short sales in Elk Grove increased however by 31.5% which means that 1 out of every 3 homes sold in Elk Grove is now a short sale – quite impressive if you consider how home buyers were not interested in short sales a little while ago. Sales seem equally divided between foreclosures, short sales and non-distressed homes.

Average price per square foot declined slightly this month from $115.55 last July to rest at $111.82. That’s a 3.2% decline year over year. Average sales price is now $232,070 – a 5% decrease for the same period from a high of $244,430. Median sales price remained mostly unchanged at $228,800. Last July it was $229,500.

Overall inventory in Elk Grove is stable at 3.2 months with foreclosure inventory at half a month.

Folsom Real Estate Market Update: July 2010

Sales volume in Folsom as elsewhere in Sacramento county has dropped considerably. It might be safe to call this year the slowest year in real estate since we started tracking numbers. Overall unit volume declined 31.6% year over year with sales dropping from 76 last July to just 52 homes sold this July. Foreclosure sales and non-distressed properties both dropped – the former fell by 52% while the latter by 29.5% year over year. Short sales increased by a small number – 2 more short sales this July over last July. Almost 3 out of every 5 homes currently sold are now non-distressed sales.

Average sold price per square foot in Folsom declined 6% year over year. From a high of $176.48 last July, it now rests at $166.08 this July. Average sales price fell 4% correspondingly to rest at $350,840 from a high of $365,587. Median sales price is now $351,450. Last July it was almost the same at $355,500.

Inventory in Folsom is around 4 months. Foreclosure inventory is around 1 month. Short sale inventory is the largest at right around 9 months.

El Dorado County Real Estate Market Update: July 2010

163 homes sold in the county of El Dorado this last month, an overall unit volume decrease of 12.8% year over year. The largest decrease was in the category of foreclosure sales where home sales dropped from 69 last july to just 42 this july. That was a decline of 39.1% year over year. Short sales increased by 7.7% while non-distressed sales dropped 1% for the same period.

Average sold price per square foot remained mostly unchanged year over year. It is currently $153.30 which is a 0.4% drop from $153.88 last July. We see the same trend here in El Dorado county that we are seeing all over Sacramento county – price stability and much lower sales volume. Average sales price also remained stable at $357,877. Median sales price dropped 5.3% from $337,750 to rest at $319,777.

Inventory in El Dorado county is at 8.9 months based on the last year of sales and 8.1 months based on the last six months of sales. Foreclosure inventory is at a little under three months.

Sacramento County Real Estate Update: July 2010

If you’re not really interested in real estate and market updates right now, you are in the majority. Definitely a large number of people have lost interest in real estate, including, it seems homebuyers.

Overall unit volume dropped 23.9% year over year in Sacramento county. 1433 homes sold this July over 1883 last July. Foreclosure sales fell 40.4% while non-distressed sales dropped 15.3% for the same period. Short sales on the other hand rose 10% year over year, but not enough to make up for the downward push on home sales.

Prices seem to have stabilized – at least for now. Average sold price per square foot is now $122.47, which is 1.3% higher than it was last July when it was $120.93. Average sales price rose 4.4% in Sacramento county up from $196,323 to rest at $204,995. Median sales price remained unchanged year over year at $175,000.

Inventory in Sacramento county is currently at 4.5 months. Foreclosure inventory is at 1.4 months.

Condo Sellers – Put Condo on FHA List

If you are the seller of a condo unit, you should be aware of the list of condo associations on the approved list for an FHA mortgage loan. You should also do your best to add your association to that list. Individual condos do not go on there – only the entire association does. Even if you are not selling your condo but just refinancing it, it is important you do the same.

This is important to do because a third of all mortgages today are backed by the FHA. Compare this with only 3% of all mortgages three years ago which were FHA-insured. So chances are good that if you bought a condo three years ago, it was not on the FHA=approved list. If you don’t get it added today, you’re missing on a major chunk of homebuyers that would be potentially interested in purchasing your home due to lack of financing. In this painfully slow real estate market, I doubt any seller can afford that.

You can check the information site http://www.CheckFHAApproval.com to see if your association is already approved.