At last we are seeing Good News for home owners reported in the press. And this is on a national basis! There appears to be a general consensus that the real estate market really has bottomed out and home prices are actually seeing gains for the first time in years. As the Wall Street Journal recently reported:
The housing market has turned—at last.
The U.S. finally has moved beyond attention-grabbing predictions from housing "experts" that housing is bottoming. The numbers are now convincing.
Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. "We finally saw some rising home prices," S&P's David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.
Nearly 10% more existing homes were sold in May than in the same month a year earlier.
The Local Picture
The Wall Street Journal was reporting from a national viewpoint, and in view of the size of the country, it should come as no surprise that some areas are still in a bad way, while others are almost booming. Fortunately for us, California falls into the latter category.
In California, equity sales (that is to say home sales excluding REOs and Short Sales) rose to 58% of the market from a level of 50.5% last June. REO’s, which comprised 29.2% of the sales at this time last year are 20.4% now. There was also a very slight uptick in short sale closings which can actually be construed as good news.
Looking even more locally, we are seeing far fewer REOs and Short Sales being listed for sale in our core markets (that is from Pleasanton to Walnut Creek plus Lamorinda).
Real estate, as always, is hyper-local and the outlying areas such as Brentwood, Pittsburg and Antioch still have some way to go before they can expect continued stability of any kind.
The fact is though, that home values are increasing. The median sale price for a 4 bedroom, 1800-2200 sq.ft. detached home with a 2-car garage in Danville was $679,000 in January. This jumped to $820,000 in June, an increase of over 20%. This may be just a blip, but prices have been increasing steadily throughout the year.
Danville may not be typical but even when we look at sale prices realized of this kind of home over all our core area as described above, a similar picture emerges, with the January median sale price of $632,000 increasing 16.5% to $736,000.
You May Have More Equity Than You Thought
The conclusion you would hope to reach from the above is that your home equity has increased considerably over the past 6 months. For those who want to sell their home but were unable to do so because they owed more on their loan than the home would sell for, this increase in equity could be enough to make the difference.
Great News For Home Sellers
For those who already had equity in their homes, this is really good news of course. When they sell their home, they will realize a much greater net return than if they had sold earlier in the year. And with low current interest rates combined with the fact that there appears to be an insatiable demand from buyers at present, you have an excellent chance of a rapid sale being agreed, possibly for more than you would anticipate.
If you are have any questions about your personal real estate situation, let me know and I’ll be happy to give you the benefit of my experience. My contact details are on the cover. There is never any obligation and I am always happy to hear from you.
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