Sacramento No BS Market Commentary - 2009 04

Through April 2009

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.
• More information:
  • www.YouTube.com/JayEmerson0
  • www.JayEmerson.com
  • www.BuyHomesInSac.com

Bottom line: Call me to get started.

Indicators & Chart Education

Part 1

Part 2

Part 3

Part 4

Part 5

Momentum Indicators 

Indicators & Chart Education -- Part 1 -- Part 2 -- Part 3 -- Part 4 -- Part 5

THE NEWEST INDICATOR -- The Swing Indicator

Indicators & Chart Education -- Part 1 -- Part 2 -- Part 3 -- Part 4 -- Part 5

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.