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Making Sense of the Market Today
August 2nd, 2010
This time around, let's look at some basic trends to see where the
Placer County Real Estate market is now that we have an economy
teetering on recovery. One of the most basic weather vanes is to look
at Absorption Rate. That is the percent of homes that are sold in any
one month (or looked at another way – how many months will it take
to sell all the homes currently for sale). A neutral market is one
that has 4 to 6 months of inventory on hand. A seller's market has
less than 4 months (more buyers than sellers); and a buyer's market
is one that has over 6 months of inventory (more sellers than
buyers).
Let's also break the market into two sections. One with homes
that sold under $300,000 and the other $300,000 and above.
Placer County Absorption Rate (All Homes Under $300,000)
It is easy to see in this graph that over the past 2 years we have
moved from a Buyer's market to a Seller's market with between 2 and 3
months of inventory over the past 13 months in the under $300,000
price range. I'll break the home sales down to REO (Bank
Owned/Foreclosed homes), Short Sales (homes owners are negotiating
with the bank) and Non-Distressed homes (no direct bank involvement).
If we look at homes sold during this time period we see what started
out as an REO market in January of 2009 has turned into a pretty
equal mix of REO, Short Sale and Non-Distressed Sales. Non-Distressed
sales are those where the bank is not involved in the transaction and
currently makes up 37% of the sales with the remainder made up of
Short Sales at 33% and REO at 30%. With the combined REO and Short Sale
listings, distressed sales still make up
nearly two thirds of all the sales in the under $300,000 range.
Placer County Market Trends Under $300,000 (Metrolist)
Here is the last graph of the under $300k showing inventory, sold
and pended homes.
Placer County For Sale - Sold - Pended (Metrolist)
This is an interesting chart because it shows that we have had a
fairly significant increase in inventory over the past 4 months while
sales have had a slight increase. Increased pendings does not always
reflect an immediate increase in the number of sold homes – as you
can see with the numbers for last summer. Some offers are canceled
and many short sales take longer than 30 days to close.
Over
$300,000
For the over $300,000 price range we are currently looking at
nearly 5 months of inventory with 22% of the homes selling each month.
That is considered to be a neutral market.
Placer County Absorption Rate for Over $300,000 (Metrolist)
And here below, is the market breakdown for the homes sold in Placer County
looking at REO, Short Sale and Non-Distressed sales. Over the past 18 months
Non-Distressed sales have made up 57% of the reported sales on Metrolist
listing service. April 2010 was 58%, May was 59% and June was 58%. Compare
that to the 63% distressed sales in the under $300,000 price range.
Placer County Market Trends for Over $300,000 (Metrolist).
Placer County For Sale - Sold - Pended Over $300,000 (Metrolist)
As you can see below, we are starting to see a rebound in the sales of
homes over $300,000 this year in the county area.
There are some signifcant differences in home sale trends
when you compare the under $300k to the over $300k homes. Besides the
overall basic trends described here, I cannot stress enough that home prices are extremely specific
to your location. If you have questions about the value of your home, please
feel free to contact me at (916) 303-0257.
Linux for Realtors?
A few days ago I went to a local Linux User Group (LUG) meeting at the library here in Lincoln, California. While I had used Linux several years ago when I worked at an electronics company, I have not kept up to date on the technology but rather sticking with Windows Vista for my Real Estate and Photography needs.
And complaining about Windows Vista...
So, after attending the LUG I decided to give it a try... and after a few days I have it running everything I need for both my real estate and photography needs. In general, it is relatively easy to install and manage a Linux system. Once you have it set up, regular updates are performed automatically just like Windows or Apple OS/X.
First, you need to select what type of Linux to run. Based on what I heard at the LUG, I decided to try Ubuntu Linux. It is the most popular installation. I downloaded the installation file and created a cd so I could “run it live” without damaging any of the Windows components. I liked what I saw, so next I backed up all of my data files to a USB hard drive.
Next, I attempted to set up by PC (An HP G60 Laptop) in a dual-boot mode where I can use both Windows Vista and Linux. This broke my PC and I decided to 'go for broke' (now I know where that term came from) and do a Linux only installation. That's how we learn, right?
Installation was done right from the live CD version of Ubuntu. It automatically recognized my HP LaserJet 3200 on my office network and the HP OfficeJet 6300 All-In-One attached via USB. Firefox browser allowed full access to all the features on our local Multiple Listing Service (Metrolist in Sacramento), and my web pages... everything except Adobe Lightroom for Photography and ZipForms 6. Lightroom was not a show stopper because the current version of Linux has some good photography software that will read and do non-destructive modifications to RAW files. I use my desktop PC for heavy duty photography work where I use Lightroom and Photoshop to organize and do final edits. ZipForms 6 proved to be a bit of a problem for a while. I was getting Java error messages even when I had a later version of Java installed than what it said it needed. I finally installed VMware (the only package requiring a purchase) to run XP within Linux to access ZipForms 6 professional over the web (XP is still a better operating system than Vista in my opinion and it runs faster in Linux!)
I have full access to my printers – including the USB OfficeJet 6300 that I drag around when needed from XP as well as Linux. Open Office comes with the Linux installation and is fully compatible with Microsoft Office... for free. I've been using Open Office for the past two years even though I had an extra copy of Microsoft Office available. I can either save files in MS Office format or use the default format because MS Office can read Open Office docs (spreadsheets, presentations, document files).
Summary
I now have a faster laptop, that I use to preview photographs as well as do all things real estate related. I do have to jump into XP when I write up or modify a contract but that's not a big deal. I think I'm going to stick with Linux rather than upgrade to Windows 7.
Everything on the G60 laptop was recognized by Linux automatically – my wireless and wired LAN, Windows Network Shares, Printers and USB hard drives. Everything on the keyboard works like a champ – adjusting the brightness, audio, etc. I watch YouTube and Hulu videos (after downloading some addons that are done just like MS Internet Explorer when it sees something you need).
What didn't work (for those more technical)
I mentioned that it took me a few days to get everything running.... well specifically trying different things for ZipForms 6 and Lightroom. For ZipForms 6 I tried upgrading Java to the latest “free” version, then manually installed Java from Sun (free also). This was a bit of a chore... since I didn't read the instructions first (wink), and didn't resolve the issue.
So I tried a windows emulator called Crossover. It did not work for either the web based ZipForms 6, the Standard stand-alone ZipForms 6 version or Lightroom. Then I tried VMware Workstation and it worked running a 'virtual' copy of XP for ZipForms 6. A free version of virtual machines called VirtalBox is another option and I didn't test that solution. I suspect that ZipForms 6 professional will work using Firefox and a standard Sun Java installation one of these days.
In the meantime I'll keep updating Java and Firefox and when they work I won't need the virtual XP any longer.
Now... do I replace my old Blackberry Curve with an iPhone4, the Samsung Captivate or the new Blackberry 9800 Torch/Slider that's coming out in August? There are certainly more apps available for the iPhone4 such as ZipForms 6 professional access, and California Association of Realtor apps too.
Hmmmm, any suggestions here? Think I'm crazy? Well, that's why they call me Crazy Jeff.
Jeff Engle
Realtor and Photographer in Lincoln, CA
Hello Neighbors,
Fun news.
Neighborly is now partnered with several different large companies in Northern California and the Bay Area. Most are tech companies, which happily takes us back to our previous lives...
Neighborly has been working for several months to get these relationships in place, and they've all gone live simultaneously.
Neighborly now offers special programs to employees of:
- Hewlett-Packard
- Intel
- Apple
- Oracle
- Microsoft
- Yahoo
- AMD
- Genentech
- KeyPoint
- Sony Playstation
- Levi Strauss
- Meriwest Credit Union
- CommonWealth Central
If you work for one of those companies, how do you get access to Neighborly's special employee programs?
Log into your employee discount portal and search:
a) Home & Garden > Real Estate category or
b) Finances & Money > Real Estate category
What is your employee discount portal called?
It could be different at each company. Examples:
1) HP's system is called "Passport”
2) Microsoft’s system is called “Benefits Prime”
3) Intel’s system is called “Vault”
4) Apple’s system is called “Passport Unlimited”
5) Weyerhaeuser's system is called "MyDiscount".
Contact your internal HR rep for help with your system.
Many thanks!
Jeff Engle
http://www.PlacerAreaHomes.com
Strategic Defaulters May Not Buy Again Soon
After the much publicized article in the LA Times where the author encouraged individuals to 'walk away from their home' this is an important note about the impact of this action.
Here is an excerpt from CNN via Realtor Magazine:
How long will it be before former home owners who walked away from their mortgages can buy again? Mortgage lenders are saying that in the future, losing a home because of illness or job loss will be seen differently than choosing to abandon a mortgage obligation for other reasons.
"If you made a strategic decision to default on paying your mortgage, it will work against you," says Bill Merrell of the National Association of Review Appraisers and Mortgage Underwriters. It will probably be seven or eight years before walkaways are able to buy another home, says Jay Brinkmann, chief economist for the Mortgage Bankers Association. "Credit scores are only one component of a complete credit decision," he says. "[In these cases] credit scores are not a good indicator of their willingness to continue to pay their mortgage."
Source: CNNMoney, Les Christie (05/28/2010)
If you know of someone who needs to explore options regarding their home, please introduce them to me. I understand these decisions are difficult and emotional, and it is important to get all the facts and understand the options available first.
Jeff Engle
http://www.PlacerAreaHomes.com
SFR (Short Sale/Foreclosure Certification)
Strategic Defaults, Borrowers Walking Away, Homes in Foreclosure
Hello Neighbors,
60 minutes did a story last night on something we see in this business on a daily basis.
"Strategic Defaults". When a home owner CAN afford their mortgage, but they decide to walk away from their home and let it go to foreclosure.
Here's the link:
http://www.cbsnews.com/video/watch/?id=6470184n
Although I agree with the depression-era view - that losing your house is the last straw - it's clear not everyone else does.
Regardless of your moral or ethical view of this trend, the economic impacts are something to find concerning. We simply don't have economic models for this behavior.
We know banks are sitting on foreclosed homes and not releasing them to the market. If 1 of every 5 upside down borrowers is choosing to walk away, then the foreclosure rates are going to continue to be record setting for years to come.
If you need to short sell, give Neighborly a call.
Please don't walk away. We can help you protect your financial future by doing the right thing.
Jeff
http://www.PlacerAreaHomes.Com
Neighborly Realty
This just in from our friend Chris Altobell with Farmers Insurance. It looks like buyers in Natomas may have a few extra hiccups:
Hi Jim,
The National Flood Insurance Program has been suspended; meaning new flood policies cannot be issued. This will likely have an impact on your clients looking to close escrow on a house in the Natomas area (or any other area) where flood insurance is required by the lender.
The flood program will not be reconsidered for extension until the Senate resumes its session on April 12th.
Here's why it is being suspended:
1) The proposal for extending the flood program is part of a larger package of programs that are under consideration for extension. There is opposition to extending some of the other programs, not the flood program.
2) There are many in Congress who want to make reforms before granting a long-term extension to the flood program.
I'll keep you posted on any further changes.
Cheers,
Chris
Have questions?
Chris can be reached at the following:
Altobell Insurance Agency
1700 Eureka Rd., Ste 120
Roseville, CA 95661
(916) 797-0990 (office)
(916) 214-2126 (cell)
www.farmersagent.com/caltobell
Thank you Chris for the updates!
Jeff
http://www.PlacerAreaHomes.com
Latest Data is Out - Sales are UP.
Escrow Rates Shoot Up, PENDINGs Increase, PENDING Home Sales
Hello Neighbors,
Hopefully this graph of existing home sales will come across well. If not, call me for the data.
What I find amazing is the ratio of homes that have gone PENDING (in escrow) vs. the amount that are on the market. It's gone nuts in the last month or two.
PENDINGs were at a record 2,921 in March - that is several hundred higher than any month since 2008.
While homes on the market have increased at a much slower pace (only 3,963 for the same March measure).
Meaning? There are segments of the market that are absolutely now a "Seller's Market". ...which is how we operated between 2002 - 2005.
Here is the data:
2009 Placer County Single Family
Detached Home Market Recap
2009 showed single family detached home
prices stabilizing with less than a 1% increase of home prices
between the first half and second half with the average sale price
moving from $335,398 to $337,672 based on the sale of 2,867 sales in
the first half and 3,241 sales in the 2nd half.
Non-distressed sales comprised 59% of
the sales in the 1st half and 54% of the sales in the 2nd
half, showing a light decrease in value of about 2% between the first
half and 2nd half.
Bank Owned (REO) homes made up just
over 29% of the total homes sold for each of the periods with .37%
increase in value overall.
Short Sales increased from 12% to 16%
of the sales volume between the first half and 2nd half of
the year and registering nearly a 5% drop in value.
Distressed sales (Bank Owned and Short
Sales) continue to be a dominate force in the market for Placer
County making up 42% of the sales for the 1st half and 45%
of the sales in the second half.
2009 Single Family
Detached Home Placer County Home Sales
|
|
1st half
|
2nd Half
|
|
Type of Sale
|
# of Sales
|
% of Total
|
# of Sales
|
% of Total
|
|
Active Owner Sales
|
1913
|
59%
|
1623
|
55%
|
|
Bank Owned (REO)
|
954
|
29%
|
874
|
29%
|
|
Short Sale
|
375
|
12%
|
476
|
16%
|
The good news is that home prices
showed considerable stability, especially for 3 bedroom homes.
Overall 39% of the homes sold within 30 days and 54% sold within 60
days (Combined Days on the Market). 54% of the Bank Owned (REO) homes
sold within 30 days and 69% sold within 60 days. Only 7% of short
sales sold within 30 days, and 17% within 60 days.
Time on the market –
Single Family Detached Home Sales
Sale Type
30 Days
60 Days
90 Days
Average*
|
Overall
|
39%
|
15%
|
11%
|
70 days
|
|
Non-Distressed
|
42%
|
17%
|
12%
|
64 days
|
|
Bank Owned (REO)
|
54%
|
15%
|
9%
|
38 days
|
|
Short Sale
|
7%
|
10%
|
14%
|
141 days
|
* Average market time may
not include prior listings
Under $250,000 home sale analysis
for Placer County
Home prices for
the under $250,000 price range rose 1% between the first half of 2009
and the 2nd half. Average prices rose from $200,055 to
$202,185. Interestingly, Short Sale prices showed level prices
between the first half and 2nd half for this price range.
Bank Owned (REO) sales decreased as a percentage of sales by 13%.
This decrease was made up by an increase of both Non-Distressed sales
of 9% and Short Sales of 4%. Distressed sales (Bank Owned & Short
Sales) decreased from 78% of the sales in the first half to 69% in
the 2nd half. Distressed sales seem to be moving up in the
price range with more traditional non-distressed sales starting to
appear in this price range.
Single Family Detached
Homes Sales Analysis
Under $250,000
|
Sale Type
|
1st Half 2009
|
2nd half 2009
|
|
Non-Distressed
|
22%
|
31%
|
|
Bank Owned (REO)
|
57%
|
44%
|
|
Short Sale
|
21%
|
25%
|
Single Family Detached
Homes Time on the market
Under $250,000
|
Sale Type
|
30 Days
|
60 Days
|
90 Days
|
Average*
|
|
Overall
|
43%
|
14%
|
11%
|
62 days
|
|
Non-Distressed
|
55%
|
16%
|
10%
|
45 days
|
|
Bank Owned (REO)
|
54%
|
15%
|
10%
|
38 days
|
|
Short Sale
|
6%
|
10%
|
15%
|
134 days
|
*
Average market time may not include prior listings
An Important Note
This
analysis is for homes reported sold through the Metrolist (MLS)
system and does not include all homes sold in the county. In
addition, home prices are very neighborhood specific. Your
neighborhood will most likely have different price characteristics
than the overall average. Please consult your Realtor © for
detailed analysis of the value of your home. This information is
provided to indicate general trends, and all information is deemed
reliable but not guaranteed.
Inventory
Last,
let's look at the inventory. Currently at the first of February there
are 1910 single family detached homes on the market for sale. That's
about 7% less than the 2050 range we saw in June and September
newsletters. REO bank owned properties currently make up 8% of the
market – a slight up-tick from the 6-7% we saw throughout most
of 2009. Short sales have increased again to a whopping 53% of the
inventory. This is up from 41% in June and 46% in September 2009.
Owner Occupied or non-distressed inventory dropped to 38% of the
inventory – down from 52% in June and 50% in September.
Placer County Single
Family Residence
January 2010
Inventory vs Sales
|
Type of Sale
|
Inventory %
|
Sales %
|
|
REO
|
8
|
29
|
|
Short Sale
|
53
|
34
|
|
Non-Distressed
|
38
|
37
|
Distressed
sales make up 61% of the sales for single family detached homes in
Placer County, and 63% of the sales. REO Bank Owned sales are still a
driving force in the market while only comprising 8% of the inventory
they comprise nearly a third of the sales.
Placer County Single
Family Residence
Under $250,000
January 2010 Inventory
vs. Sales
|
Type of Sale
|
Inventory %
|
Sales %
|
|
REO
|
10
|
36
|
|
Short Sale
|
76
|
24
|
|
Non-Distressed
|
14
|
38
|
For the
under $250,000 priced homes, distressed sales made up 86% of the
inventory and 60% of the sales. REO Bank Owned sales comprised 10% of
the inventory and over a third of the sales.
|
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Jeff Engle PlacerAreaHomes.com
Lincoln,
CA
More about me…
Neighborly Realty
Address: 919 Reserve Dr, Suite 123, Roseville, CA, 95678
Cell Phone: (916) 303-0257
Email Me
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