The magic "Swing indicator" numbers for May are 37-14-3. That means almost 69% of the 54 zip-codes and Counties tracked had a momentum "UP tick" in July. Going back to 1998, the only period that matched or exceeded this momentum turn was Spring/Summer of 2004. That's a mighty meaningful indicator.
Does it mean this is a bottom? It is A bottom. I'm not convinced it is THE bottom.
Can it turn and go down? Yes, in some zip-codes that is probable due to the supply still looming.
What do you mean "in some zip-codes"? You remember that real estate is a local commodity. That means, for example, that parts of 95864 are in higher demand than other parts of that same zip-code. Likewise, adjacent zip-codes can have a material difference in supply and demand. That's why you should not generalize and apply a National statistic (or even a State statistic) to your targeted area. Check out the Communities and see how a local perspective makes a difference in your understanding.
Resales (1 - Existing Home Sales) are increasing but are still understating the demand. My clients who are buying know that sometimes the competition wins. There is still competition and supply is sill low, relatively. The most telling indicator regarding resales is the "months inventory". Currently at 2.9 (normal between 4 and 6).
The number of bank-owned homes that sold (2 - REO Sales) during the month has decreased on an absolute scale. Relatively, however, REO sales are still over 30% of the sold inventory. That's an indicator of waning supply (and wanting buyers).
The median price for all of Sacramento County (3a - Median Price (Sac Cnty)) is unchanged and now equal to the median price back in February 2002.
The El Dorado County median price (3b - Median Price (ED Cnty)) is also unchanged and is equal to the median price back in June 2003.
The Placer County median price (3c - Median Price (PL Cnty)) is hard to comment on since Placer County hasn't published their numbers!
NODs, which depict the beginning of the foreclosure process for a home (4 - Notices of Default) are lower than recent history. Banks, in their infinite wisdom only bested by our government, have learned that they should wait as long as possible to foreclose on homes. Accounting regulations require they dispose of non-performing assets within a short timeframe. That means they need to be ready to sell a property when they foreclose on it. THAT is why the supply is taking some time to hit the market.
Builders are not clammering to get permits for construction of new homes (5 - New Home Permits). These developers and builders SHOULD guage the marketplace for demand and supply BEFORE starting a development. If there are plenty of homes for resale, a builder would have less demand for new homes and, hence, less motivation to get permits.
The cost of money for homes (6 - Mortgage Rate) is still historically low. Recent financial news also suggests that investors still desire U.S. investment vehicles. With this news, interest rates may see a longer life at this low range. Then again, leave it to the government (a 'Housing Czar') to corrupt naturally occuring corrections.
As a summarized and simple way of depicting "momentum", my proprietary Swing Indicator (7 - Momentum Swings) shows the remarkable cycles that are natural in real estate markets. And the statistics for July are at a relative peak going back many years.
There are no saviors except time and a functioning market. But a functioning market cannot be continually corrupted by short-sighted politicians. And now those lemmings have inserted things like HVCC (appraisal process) which is adding at least 2 weeks to the duration of every escrow (if a loan is involved). Worse yet is that those gun-shy appraisers are over-depreciating values. They don't want Congress to do any more stupid things. (I know that's a pipe dream.)
For all of you who think the process will get easier, I'm here to tell you that it's not likely. That's why you need an experienced real estate Broker on your side. The indicators are showing a change in the cycle but still not showing a true reversal.
There are points of resistance in certain areas of the region but much of it is artificially instigated by the all-knowing government. It will always be true that, all things remaining equal (e.g.,) Folsom will be priced higher than Florin.
Facts:
Inventory is "short", in more ways than one. The demand is waiting on the sidelines. The government keeps throwing band-aids at the symptoms. Homes are not on the market for long; the May NOD filings are down from April but you can see that they are not on the market; interest rates are at 40-year lows and staring to creep upward; median price momentum is mostly up (for 54 zip codes-see Swing Indicator); and new home permits are low but remained at the same number. When the inventory picks up, the choices will again be plentiful. No more band-aids, just Buyers. That's what we need.
The Swing indicator (#7; my newest indicator) is still showing a swing from "down " to "up ". Simple Ups and Downs depict the swings and gaps between Up ticks and Down ticks. I love it when simple truths are depicted in simple pictures.
What is YOUR NEXT ACTION?
Investors - Even cash buyers need to move quickly in this market.
www.BuyHomesInSac.com - a proprietary and secured portal of information and listings.
Buyers - this is a market for you! Call me immediately
I know some creative and resourceful lenders. Don't let fear win.
Distressed homeowners - Don't pay anyone to help you. You can get free help. Call me.
This page is dedicated to you if you are interested in market changes and an education in the "core metrics" that explain, in part, the market dynamics. These charts are the product of my proprietary method for tracking changes. The charts do not only depict the raw data but, better yet, show the momentum of changes in that data.
The magic numbers for April are 23-20-11. That's how I will summarize the Swing Indicator. It means 23 price trends are Up, 20 trends are Unchanged, and 11 are Down. It's part of the cycle to see these numbers oscillate.
Banks are about to increase inventory. Is this a sign of things to come? Are we going to depend on the banks ("government") to supply our real estate products? Twenty years ago, the banks flooded the market with REOs and hurt themselves in the process. You see, as prices go down, so goes the banks' collective portfolio values. While a non-performing asset is much worse for a portfolio than is a low-priced asset, the latter tends to exist on their books for much longer.
So the banks are damned. They are taking losses and so are people. When it sells at a loss, it affects the values of every neighbor with a similar home. What to do...
There are no saviors except time and a functioning market. But a functioning market cannot be continually corrupted by short-sighted politicians. While Congress is plugging holes with rice-paper, banks are stunned by their new regulations and conditions. And buyers! Well, the buyers are sitting on the fence while the market is inundated with Short Sales (which quickly go Contingent).
One of the many pains in this market is Buyer Staying Power. While good listing agents are busting a nut to get banks to accept short offers, some buyers have no problem seeding an area with offers, quickly jumping ship when banks accept. Is it fair? No. Can I blame them? No. Does it chap my hide to hear a buyer's agent say "they've decided on another property"? YES! Can I force a buyer to stay singularly loyal to one offer? No.
For all of you who think the process will get easier, I'm here to tell you that it's not likely.
That's why you need an experienced real estate Broker on your side. The indicators are showing a change in the cycle but still not showing a true reversal. There are points of resistance in certain areas of the region but much of it is artificially instigated by the all-knowing government. It will always be true that, all things remaining equal (e.g.,) Folsom will be priced higher than Florin.
Facts:
Inventory is "short", in more ways than one. The demand is waiting on the sidelines. The government keeps throwing band-aids at the symptoms. Homes are not on the market for long; the April NOD filings are down from March but you can see that they are not on the market; interest rates are at 40-year lows; median price momentum is mostly up (for 54 zip codes-see Swing Indicator); and new home permits are down but inched upward in April. When the inventory picks up, the choices will again be plentiful. No more band-aids, just Buyers. That's what we need.
The Swing indicator (#7; my newest indicator) is still showing a swing from "down " to "up ". Simple Ups and Downs depict the swings and gaps between Up ticks and Down ticks. I love it when simple truths are depicted in simple pictures.
What is YOUR NEXT ACTION?
Investors - Even cash buyers need to move quickly in this market.
www.BuyHomesInSac.com - a proprietary and secured portal of information and listings.
Buyers - this is a market for you! Call me immediately
I know some creative and resourceful lenders. Don't let fear win.
Distressed homeowners - Don't pay anyone to help you. You can get free help. Call me.
These charts depict the momentum of changes in the underlying raw data to help forecast direction. These are not a guarantee of future direction but aid in the prediction of cause/affect in the various market forces. No single indicator tells the whole story. Also charted is the raw data itself. For an explanation or for a monthly subscription to this periodic report, call or email Jay Emerson (916-517-9606, Jay@JayEmerson.com). The data is deemed reliable but not guaranteed. Sources include DataQuick, CBIA, Sac MetroList, and public escrow information.
This 6.88 acre parcel in Placerville has a well, power, various building sites/options, custom home plans, and a creek that the gold-diggers used back in the 1850's. Priced at only $399,900, the per acre price is a great deal.
Seller is motivated.
Marketed by REALTOR® Jay Emerson, CA License 01788488, 916-966-8700
You hear the old news about real estate statistics. You read headlines that could, by themselves, cause a panic. But where are the forecasts? Better yet, where are the forecasts that are relevant to YOU? Some pay thousands to get this information. My treat, to you!
This commentary is my opinion of Sacramento's real estate market using history, current conditions, and the market forces. This is not a crystal ball. If I knew of guarantees, I would not be writing this piece.
This ongoing analysis is similar to the concept used in foreign exchange (forex) currency trading (a commodity much like real estate). While this is most useful to an investor, understanding the market is necessary even when buying or selling your family's shelter, not an investment property. This type of analysis is a speculator's tool to predict the direction of the NEXT data point. And those can be billion-dollar guesses. Explaining history should be done but it's your NEXT action that makes a difference. Refer to this month's charts and note where the Momentum indicator crosses it's zero axis (red axis & typeface) - it has been a predictor of the change in actual volumes. Specifically:
Home Sales momentum crossed beneath zero at August 2005 coinciding with the marked decrease in Sales in January 2006. Momentum hit a bottom in December 2007 indicating the Sales spiking in March 2008. And momentum is still positive.
Permits momentum hit above zero first in April 2002, spiked with the last big builder push, and has stayed at or below zero since September 2004. The builders that have survived are not going to repeat the mistake.
NOD momentum went above zero in November 2005 which points to the increase in NOD volume in the first quarter of 2006. NOD momentum seems to have peaked in August 2007.
REO Sales momentum went above zero in January 2006 pointing to the marked rise in volume in April and May 2006. REO Sales momentum seems to have peaked in March 2007 and heading down (but still positive).
Mortgage Rate momentum went below zero in August 2007 pointing to relative drop in rates from October 2007 through May 2008. The momentum is still negative but it's meandering.
Median Price momentum peaked in February 2005 which points to Price peak in August 2005. Momentum crossed beneath zero in November 2006 and Prices really started to fall in March 2007. Momentum is still negative.
What does this mean when mixed together? That depends on YOUR NEXT ACTION.
If you are running for President - Don't increase taxes. Don't increase the size of government. Don't spend beyond your budget. Don't budget beyond your income. Don't leave the door unguarded.
If you are a Buyer - Rates are still low. I don't foresee a drastic move by the Fed but our election may have some impact and momentum could turn upward. Loan options are changing. There are still good homes for sale and more every day. Prices are at 2002 levels and could still decline more, especially in certain zip codes. Other areas are doing well. Be prepared for a multiple-offer situation if your target is $350K or less.
ACTION PLAN: Hire me. Discuss market and decide on strategy. Put your cash in a bank account in order to prove you have it- increase your buying power. Talk to your lender or ask me for a suggested professional. Be prepared by understanding your housing/search requirements so I can build you a custom and private website for your search results - know your buying power first. Eliminate homes you won't consider. If you're considering a newly built home, I can get you more incentive or upgrades by representing you on your first (and every) visit. Come with me to tour the homes you desire. Make offer(s). Go into contract. Settle all disclosures, inspections, and conditions. Sign, buy, and move!
If you are a Seller - If you don't need to sell, wait another year and ask again. Otherwise, you need to know your immediate and general market competition and forces. There is a perception that a REO listing is a better deal. You will have to be very realistic about the price a buyer will offer. Check your emotions at the door. That's what your competition is doing.
ACTION PLAN: Hire me. Discuss market and decide on strategy. Stage your home. Keep home clean and available. Market, market, market your home. Consider offer(s). Go into contract. Settle all disclosures, inspections, and conditions. Sign, sell, and move!
Whether you are buying, selling, or running for President, my service commitment to YOU is unequaled. If you know someone who is looking for a great Realtor and would appreciate the same service I would give you, please give me their name and number and I'll follow up. You know you can trust me.
Here are June's market data and momentum. I've added the raw data to each chart to give you a better sense of where the data is coming from. My uncharted "pulse" indicator is a combination of all of these charts -- this is a great market. And since inventory has increased a small amount while the number of sales has increased, there are still choices and fewer multiple offer situations. The media is telling us there is a decrease in resales -- that is a national statistic. Real estate is a local commodity and national statistics cannot tell you how our 3 counties are doing.I have a new indicator called the "pulse" indicator. This is my reading on the activity and psychology of the market in this area including a summary of the momentum indicators shown in the charts below. Real estate is a local commodity and national statistics cannot tell you how our 3 counties are doing.
The pulse is currently rated as dark Amber. That means it is Red hot for those who are able to move quickly when a desired home hits the market. But it is only luke-warm (Yellow) for those who haven't been pre-qualified with a lender and are waiting for the bottom. And for sellers, the pulse is a light Yellow - there are buyers but they know you're competing with banks and short sellers.
Six of my clients are now in escrow. And you would be smart to let me represent you. Whether you're looking at an existing home or a newly constructed home, I can get you a great deal and help you throughout the process (and beyond).
The Market: The momentum indicators show another increase in resale activity, month-over-month. But inventory increased. However, the inventory increase was not equal to the number of sales so there is now only 4.5 months' inventory (length of time to sell all Active listings), down from 4.8 last month. Remember, my momentum indicators are no guarantee of how a market will change in the coming months but they are healthy in several aspects. The momentum of REO sales (indicator of bank-owned inventory) is still increasing which is indicative of the number of successful offers and the percentage of listings that are bank-owned. Notices of Defaults (indicator of new, possible foreclosures) are decreasing in numbers and, hence, momentum. The number of resales took another sharp leap upward contradicting the media's reports. County-wide median price decreased a small amount while the dollar value of closed escrows jumped again. Builders in this region are also going against the national "grain" and are building new homes.
The Media: The media are focused on rigging the election but have some time to inject their bias on the real estate market. If "speculation" didn't occur, prices would be erratic and the market would not have smooth corrections and cycles. I speculate every day. Don't you?
Congress: And speaking of speculators, Congress is losing their bets. I want to fire them. They work for us and are doing a horrible job. As Glenn Beck would say, "it's time for pitchforks". The housing bill didn't and won't do much for people other than the banks who sold the bad paper (subprime products to subprime borrowers).
My counsel to Buyers: Get pre-qualified -- I'm connected to some great lenders. Call me to get your FREE web site that can provide more detailed search requirements and daily updates to your inbox. Eliminate listings that work and call me when you have a short-list to view. And remember my FREE reports (http://JayEmerson.com/Publications.asp) on making this important buying decision.
My counsel to Sellers: Price your home at or below the comparable sales. Stage it well and make it available with little or no waiting. Low-ball offers are relative - if you price too high, all offers are low-balls. I have FREE reports (http://JayEmerson.com/Publications.asp) on selling in this buyer's market.
My counsel to Investors: Banks are not accepting blind offers but they are accepting reasonable offers. Do your homework and call me for an edge in getting access to some great deals. I'm here to help you. Call for any of my FREE reports (http://JayEmerson.com/Publications.asp) on investing in real estate.
Bottom line: Call me to get started. And I'm never too busy for your referrals!
I have a new indicator called the "pulse" indicator. This is my reading on the activity and psychology of the market in this area including a summary of the momentum indicators. Real estate is a local commodity and national statistics cannot tell you how our 3 counties are doing.
By the way, if you know someone who is selling or buying and who would appreciate my level of service and expertise, send me their name and number and I'll be glad to follow up. I'm never too busy for your referrals.
Jay Emerson | Jay Emerson, The Galster Group | 916-517-9606
814 T Street, Sacramento, CA
HISTORIC STRUCTURE!
4BR/3BA Multi-Family, 2 units
offered at $595,000
Year Built
1915
Sq Footage
2,100
Bedrooms
4
Bathrooms
3 full, 0 partial
Floors
2
Parking
2 Car garage
Lot Size
.15 acres
HOA/Maint
$0 per month
DESCRIPTION
HISTORIC STRUCTURE! Code benefits! Unique and beautiful mid-town bungalow/duplex on a large lot in the Southside Historic District. Nicely remodeled to keep 1915 charm. Great curb appeal - striking entrance above street with covered front porch. Upstairs is a 2/1; downstairs is a 2/2. Wait until you see the back yard. Short sale subject to lender approval. Commissions to be split 50/50.
see additional photos below
PROPERTY FEATURES
Central A/C
Central heat
Fireplace
Walk-in closet
Hardwood floor
Tile floor
Family room
Living room
Breakfast nook
Dishwasher
Stove/Oven
Granite countertop
Laundry area - garage
Balcony, Deck, or Patio
Yard
COMMUNITY FEATURES
Garage parking
Guest parking
Secured entry
OTHER SPECIAL FEATURES
Electronic gate to access from alley to garages
Historic structure brings benefits of building and modification code
Close to park, downtown, transportation and highways
Home and income possibilities
Separate outbuilding with individual laundry rooms
Separate garage structure with 2 single-car garages with openers
Jay Emerson | Jay Emerson, The Galster Group | jay@jayemerson.com | 916-517-9606
4406 Palm Avenue, Sacramento, CA
Foothill Farms diamond!
2BR/3BA Single Family House
offered at $578,931
Year Built
1920
Sq Footage
2,324
Bedrooms
2
Bathrooms
3 full, 0 partial
Floors
3
Parking
2 Car garage
Lot Size
.39 acres
HOA/Maint
$0 per month
DESCRIPTION
You will love this diamond in the rough! Unique Foothill Farms property with two lots (vacant lot is MLS#80047038). Newer floors, kitchen, dp dual-hung windows, siding, HVAC, master bath, & many choice upgrades. Charming home with porch & large, fenced yard. Remote controlled electric gates at front and back. Video security system w/monitor. Full basement for storage or extra bedrooms. Loft has own bath. Buyer needs to validate - adjacent parcel could be split off and sold or developed.
If you read the local newspaper, you may have seen that April's home sales made front page news. By itself, it's a sign that there were more buyers in the market than in March. But more enlightening, and not understood by the news writers, is that inventory indeed dropped by a more significant amount. Instead of 8.3 months of inventory (length of time to sell all Active listings, all things remaining equal), there is now only 5.9 months' inventory. That is a healthy number. If it's too high, supply is higher than demand. If it's too low, well, it's the opposite. Anywhere between 4 and 7 is a sweet-spot.
But stories about the trenches from someone in a cozy tent cannot depict the truth when compared to someone actually in the trenches. Read my trench story here... http://JayEmerson.com/Indicators.asp
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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