We recently found a new blog among our incoming links, Sacramento Land(ing). This one’s definitely worth a look, and there’s a lot of good information from multiple sources.
On the other hand, there’s a lot of emphasis on those round soapy things. You know. Will they burst and the like.
That’s fine.
Apropos the market’s supposed softness, I was working with some buyers in Folsom over the weekend, and I told them about how many homes were spending longer and longer periods on the market, and it seemed like we had lots of inventory to look at. By the end of the tour they pretty much had their heart set on this one home.
When I looked it up today, it had gone pending sale.
Hey, wait — homes being sold out from under my buyers. This isn’t supposed to happen with the housing market round soapy thing bursting and all.
But — go figure — it’s possible to sell a home by pricing it well in a seller’s market, just as it was possible to fail in a buyer’s market by pricing too poorly. The market itself doesn’t determine success or failure. It only shows us how wide the margin of error is.
Tomorrow I’m off to meet with a seller here in Cameron Park to see about a listing, so I thought I’d take a minute to write about Cameron Park’s market so I’d have it handy for him.
Thirty homes sold in Cameron Park in December, down just slightly from 33 at the same time last year. This year’s average home was a scant 1834 square feet, compared to the larger average of 2252 last year, so if you just look at prices, they’ve gone down! (Which is why the Sacramento Bee consistently gets things wrong by focusing on median sale price — who cares? Not even average sale price tells you much unless we understand what we’re selling).
On a cost per square foot basis, homes appreciated 11.5% from December to December. This year’s average home listed for $449,841 and sold for $440,643, or 98.0% of list. The median sale price was $429,975).
Days on market were up substantially, from 55 days on average last year to 76 days this year, on average, but because of the strong sales in December, the “expired to sold ratio” doesn’t look too bad, at 53.3%, but it is up from last year’s figure of 24.2%.
I’ve written a 26 page booklet about expired listings, “How To Get Your Home Sold Next Time”. I must start getting that bad boy into the mail and trying out the new postage rates. Before too long I should also turn it into a PDF an make it available as an eBook. Naturally it includes our Expired Listing Checklist and some other goodies.
I was reminded of one of the elements on the list today, compensation for the agent bringing in the buyer. Especially in the hot buyers’ market we just left behind, a lot of sellers got used to the idea of reduced commission prices — no doubt thinking that their listing in MLS was enough to get their home sold, no matter how much they offered the buyer’s agent. The reason I was reminded of this is I was preparing a tour for some condo buyers I have — fellows who’ve worked with me in the past. We get along really well, and feel comfortable with one another, so I was joking with them that one of the listings I was going to show them had a higher commission than the rest (3.5%), so they should buy that one from me.
Well, our tour is Sunday, and lo and behold, that one got sold before I could show it to my buyers. The ones with the lower commissions are still out there. Remember, sellers — a buyer’s market means your competing. You compete for the attention of buyers with an attractively priced home, and you compete for the attention of those buyers’ agents with an attractive commission.
It was a REMAX Gold agent who had the listing, too. You go, girl. That won’t be one of the 47% expiring in Sacramento County, then, will it?
Sellers in Pollock Pines experienced a bit of a chill this winter — and the weather might have been bad, too!
Residential sales in Pollock Pines were slow in december. Ten units sold, as against twenty last year — you don’t need a calculator for that one. Average days on market for homes in Pollock Pines are up to 91 days, compared to 35 days a year ago. Meantime, though ten homes sold in December, nineteen expired, so our expired to sold ratio was 190 per cent. Meantime, inventory is up to 9.7 months worth.
The average home that sold in Pollock Pines listed for
$447,869 and sold for $437,350, or 97.7% of list. (Last December sellers averaged 101% of list, in contrast). The median sale price this December was $387,000. Appreciation from last year was 4.9% on a cost per square foot basis.
Area new home sales were off sharply in the last quarter of 2005, the Sacramento Business Journal recently reported. According to the business journal, builders sold 56.7 fewer units in the fourth quarter of 2005 as they had a year earlier. (Full article).
Not to be outdone, I thought I’d run some numbers for resale home sales during the same period, first for Sacramento County and then also factoring in El Dorado County. Either way you figured it, resale home sales were down 25.5% in the fourth quarter of 2005 compared to the fourth quarter of 2004.
The Business Journal hinted at rising material costs pushing prices too high as one factor among many, and it may be that that’s likely to affect newer homes more. I suspect that much of the discrepancy comes from homes on the higher end of the price spectrum, and indeed, the Business Journal notes that the worst numbers in terms of declining new home sales are in El Dorado County, where some of the new homes are pretty spectacular, and priced accordingly.
I knew if Serrano kept building they’d eventually hit a wall and run out of rich golfers. I mean, how many rich golfers can there be?
Freddie Mac reported that interest rates have dropped this week to 6.15% for the 30 year mortgage. This brings us back to the levels of late October.
There is speculation in the marketplace that thruout the year the rate could edge upward in the range of a half point to 6.5% or thereabouts.
Experts seem to think this could slow down the housing market a bit but overall feel confident that 2006 will be another strong year as inflation worries seem to be ebbing a bit based on certain recent data releases.
Rates on the 15 year fixed and the 1 year adjustable have also edged downward.
Fannie Mae has announced the conforming loan limit is now $417,000 for single family homes in 2006. It is estimated that an additional 466,326 homeowners would be eligible for a conforming loan.
Every Year Fannie Mae adjusts the conforming loan limits based on the median (average) price of homes - new homes and existing homes are included
Multi-Unit Loan Limits are as follows:
two-family loans: $533,850
three-family loans: $645,300
four-family loans: $801,950
The 2006 loan limit for second mortgages: $208,500
Conforming Loans for Properties in Alaska, Guam, Hawaii and the US Virgin Islands are 50% higher
Lenders will generally lend up to $417,000 for VA Loans
Additional info can be found here: FHA Loan Limits
In addition to FHA, VA and Conforming Loans there are Non-Conforming Loans with higher loan limits. These loans also have different underwriting guidelines such as variations in Loan to Value, credit scores, debt to income ratios, no income verification and many other attractive and interesting
guidelines and benefits.
This is an opportunity for homeowners to consolidate their debt and equity loans into one conforming loan with the higher loan amount. Right now there are thousands of Adjustable Rate Mortgages with 2 year, 3 year, 5 Year and 7 Year terms that will be converting into Adjustable Loans and the homeowner will no longer enjoy the fixed rate they have been used to.
It gives me great pleasure to introduce my first guest author, David Scheer. David is the Broker / Owner of First Home Financial Mortgage. We’ve had a finance and mortgage category going for some time, but we were really just taking a bow to publishing the latest mortgage rates — I’m really not the guy to be writing about lending.
So please join me in welcoming David to the site with your feedback and comments. In a few days I’ll be working on making his contact page a bit less cheesey so you can easily drop him an email.
Thanks, David, for pitching in. I look forward to reading your posts!
Hiccup.
Wow, has it really been six days since my last post? Looks that way. I’ve been so busy with a couple of other business activities, and I must really apologize to those of you hanging on my every word.
Thanks, mom. 
(Actually, it’s worse than that — I don’t think my mom reads this).
Anyway, we’ve been working on putting a whole package together to help sellers whose listing has expired and who may still want to sell. If that describes you, please let us know and we’ll send you a preview copy. Also, though I’d backed off and was essentially a full time webmaster in late 2005, now I’m back to working with some of the buyers and sellers who submit inquiries via our site, so that’s keeping me off the streets as well.
Be that as it may, I’m still planning to keep those posts coming, though probably not daily any more. I’ll try to not let it get down to once every six days, however. That’s practically snail mail!
For those of you who are likely to say “Give it to me straight, Doc, how bad is it”, here you go:
As you can see, expired listings versus solds are up, from 12% last year to 49% this year. The average time spent on market with these expired listings was 96 days, an ironic average given the old ? Mark and the Mysterians Tune, “96 Tears”. But dry those eyes and check out our tools for analyzing Expired Listings — we can put your listing back on track.
Meantime, as to the other numbers. The median sale price in December in Placer County was $461,000. The average home that sold did so after 49 days on the market (up from 38 last December). The average home listed for $526,579 and sold for $515,751.
Appreciation from December to December was 12.1% on a cost per square foot basis, and a similar 12.3% on an average price basis. As more listings expire, we expect that rate of appreciation to slow considerably, and naturally we may get to a year where it turns into a depreciation rate, though I doubt that’ll happen in 2006 or 2007. Of course, that’s just my opinion, I don’t really have a crystal ball.
Our best buy just got even better. The seller has authorized a price reduction on our listing of this immaculate newer Natomas home. The new price is $439,000. Buyers, have your agent check the comps for you on this one, and you’ll want to see it. See it, and you’ll want to buy it. Buy it, and you’ll wonder why you ever lived anywhere else. But don’t take our word for it — go check it out for yourself!
Details
More Photos
Showing Request
Send to Friend
Turning now to residential sales throughout El Dorado County, 151 units sold through the MLS in December, down 37.3% from last year’s 241 units. The average home listed for $547,589 and sold for 97.3% of list at $532,851. The median sale price was $492,500. Compared to last December on a cost-per-square-foot basis, homes appreciated 8.2% in value.
When we look at a graph of total listings that either expired or sold during the two periods, we can see that in the last month, your house was just about as likely to expire unsold as it was to sell.
Can We Beat These Averages?
We believe strongly that you can beat the averages by the rigorous application of the P.A.C.E. Method. Yes, your home will sell, if you and your agent do the right things to get it sold. If your listing has expired, start by downloading our expired listing checklist, then call us at (877) 735-5657 and we’ll be happy to provide you with a free professional expired listing analysis to help you correct the problem and move on.
We’ve already discussed December’s market for residential properties throughout Sacramento. Now we turn our attention to residential income properties. These are mostly — though not exclusively — multi-unit properties, from duplexes on up through apartment buildings with any number of units.
December saw 68 residential income properties change hands in Sacramento County through the MLS, down from 117 in December of 2004. The average property listed for $498,747 and sold for 98.1% of list at $489,357. Appreciation based on average sale price from December to December was 6.2%. (Average cost per square foot is not readily available on residential income properties).
What we expect from our earlier review of residential income properties is more softness in the market than in residential properties, and we’re not disappointed.
Inventory for residential properties is at 5 months, while for residential income properties, the number is seven months. And while the expired to sold ratio is high for residences at 86.9%, it is a whopping 127.9% for residential income properties. (Or to put it another way, if you create a pie chart, the expired slice is 56% of the total, while the sold slice is 44%).
As the market slows slightly, this is really no surprise. We expect that investors who were hoping for appreciation are likely to be dumping more properties on the market as the market cools, but at the same time finding fewer buyers as the timid begin to avoid the game altogether.
This market update covers residential listings sold through the MLS for all of Sacramento county. Included are non-mobile-home residential units (Condos, Detached Homes, etc.), but not residential income properties.
In December of 2005, 1239 residential units sold through the MLS. Average sale price looks to perhaps have an error in one of the values, since it came out at 105.3% of list, which looks suspect. Average list price is reported at $403,108, and average sale price at $424,405. The median sale price was $368,000, up 11.5% from December of 2004.
Days on market were up 45%, from 29 last year to 42 this year. Expired listings were up dramatically as a percentage of solds, from 11.9% last year to 86.9% this year.
The image below compares the two periods graphically, and shows expired and sold listings as a percentage of total. (We focus in on expired and sold, but note that there are other things a listing can be doing, such as going “Pending” (opening escrow, typically resulting in a sold listing, or being marked “Withdrawn Cancelled” — i.e., seller changed their mind for some reason).
OK, I’m it’s fair to say I’m a little excited about this listing over in Granite Bay I found. If you can put together $730,000, this listing appears at first glance to be significantly underpriced — I’d want to run more detailed comps to be sure but I’d be happy to do so if you’re interested. If so, please call John at (530) 672-9160.
The reason I say it appears significantly underpriced at first glance is that I was looking for bargains — checking by price per square foot, and noticed this one had been on the market awhile. Two reasons why this may be stick out (starting out too high and lowballing the buyer’s agent commission). If I’m right, these won’t affect your enjoyment of the property at all, they’re just technical details about the listing. And I certainly don’t mind working for a lowball commission in this price range.
Here are the additional photos and listing details.
I’m thinking about adding a new category to the blog “Opportunity Hound”, and spending some time every week looking through the MLS to try to find the best buys, and blogging about them.
One of the problems with talking about the market slowing down is that it’s inherently negative. The flip side of that coin is that there are sometimes outstanding bargains to be had, either because of a lack of competing buyers not picking up the good houses, or because a seller who’s failed for three to six months may be ripe for a “lowball” offer.
And by the way, if you’re a buyer and you want someone to scout out such bargains in your price range personally, I’d be happy to either do it for you or refer you to one of my teammates.
We just did an update of the pages real estate by subdivision pages of our Granite Bay site. Sorry about the delay on that, I realize that they were getting a bit long in the tooth.
I’ve beefed up the site’s privacy policy.
I know, as pages go it’s not the most compelling thing around, and it ranks somewhere about 89th of the top 100 URLs on the site, so it’s not the most popular destination, either. So I don’t want to wax too poetic about the darned thing, yet at the same time, the change we’ve made is significant. For the longest time, we sort of held on to the option of adding your name to our site’s mailing list.
We never really had a mailing list, mind you, but in case we got one, by golly we were going to add you to it.
What we’ve done in our latest version of the privacy policy is increased your protection by promising not to even do that. We want all our mailing lists to be not only opt-out, but opt-in as well. In a phrase, “If you don’t sign up for it, you don’t get it.”
This is just the golden rule in action, really. In my work on this site and the other sites in our network, I wind up visiting a lot of Realtors®’ web sites, and one of the things that irritates me about some of them is that if you ever fill out any kind of form, you wind up on a list, getting emails that start off something like: “You subscribed on our web site”. Hello? No I didn’t.
No, you didn’t either.
And now our privacy policy, that most boring of documents, guarantees that you didn’t, in writing.
Joni Becker in our REMAX Gold office in Cameron Park recently listed this newer home in Elk Grove’s Stonelake Community. It’s a 3 bedroom / 2 bath home with a den that is in immaculate condition.
This Morrison Home features plantation shutters, and upgraded carpet and tile. The clubhouse, pool, and tennis courts have many activities to enjoy.
For more information, visit the links below:
Details
More Photos
Showing Request
Send to Friend
Some time ago, Frances Flynn Thorsen over at RealtyGram (Homer’s voice: “Mmmmm, Realty Grahams….”) posted a link to a wonderful consumer caveat article for those considering a real estate investment seminar, the the real estate B.S. artist detection checklist.
Next to that tome, my Listing Agent BS Artist Detection Checklist seems like a minor little snippet in comparison. I think I need more filler pages. Oh wait — that’s number eleven!
