National & Regional Snap-shot: The presidential election and Hurricane Ike became after thoughts in September as the credit crisis on Wall Street spread to Main Street. The hope for an election year rally in the stock market has been put on hold, as the Federal Reserve and Treasury Department have scrambled to utilize every tool in their arsenal (including getting congress to authorize a $700 Billion bailout) to calm the markets and keep the American economy flowing. From a regional standpoint last month, 1934 homes sold in Sacramento County, 1354 were bank owned (70%), 200 were short sales (10%) and the median home price dropped another 11% from $215k in August to $192k in September.
Folsom: Seasonal slowness in Folsom dropped sales from 67 in August to 49 in September. However, when compared to September ‘07, home sales increased by 136%. "Distressed home sales" more than doubled from August '08 with 19 bank owned home sales (40%) and 4 short-sales (8.50%). Over the past year, foreclosure sales in Folsom increased 850%. The biggest change in Folsom from August '08 to September '08, was a more than 50% increase of bank owned homes available for sale. The total supply of available homes dropped from 280 on 9/1/08 to 259 on 10/1/08.
El Dorado Hills: El Dorado Hills was a bright spot last month with the sales rising from 50 in August to 64 in September (unusual to see this type of reversal in September). The "distressed sales" theme continued in EDH with 22 sales (33%) being bank owned and 11 sales (17%) being short-sales. The supply of homes for sale dropped from 401 on 9/1/08 to 378 on 10/1/08. Serrano continues to be the neighborhood of choice for banks liquidating homes at below market prices. Inside scoop: If you aspire to live in Serrano, due to all of the foreclosures, there are excellent, rock-bottoms deals available under $135 per square foot.
Aaron's take on the markets: The national, regional and local markets continue to be influenced by bank owned homes. Banks continue to liquidate their inventories, putting downward pressure on home prices. If you have to sell your home in the next year, I would suggest moving quickly and pricing it at, or slightly below, the market. If you don't have to sell, then now is not the time to test the waters. The good news is, it is an excellent time to purchase a home. Prices are relatively affordable and interest rates remain low. If you are looking to upsize, sell your home quickly, then get a great deal on your dream home! Real estate always moves in cycles, and so far, this cycle has not bottomed. When financing becomes easier and repo's subside, prices will stabilize and the recovery will begin. The big questions are: Will the bail-out of Wall Street work? Will our government help "upside-down" home owners stay in their homes? Will the Paulson Plan some how stop foreclosures all together? Stay tuned...
Personal note: I just listed a beautiful home for sale at 1042 Houston Circle in The Parkway in Folsom: $439k. This 1-story home is in excellent condition and ready for a new family. 4 Bed, 3 bath, 3 car-garage, 2,250 s/f. Please tell a friend!
Have a great October! Aaron Cullen, Brokers Inc. Residential Real Estate
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