In my recent post on this series, San Jacinto Market Analysis - SOLD 5/20/09 - 6/20/09 I shared insight to the overall San Jacinto real estate market by providing a brief synopsis of current market conditions by analyzing all of the 136 residential real estate homes that closed escrow between May 20th and June 20th, 2009. In the previous segments I looked closely at each of the 4 types of financing used to buy a home in the San Jacinto CA real estate marketplace. The five previous segments published are:
In this portion of my report I want to look at the data provided and compare the benefits and strengths of each finance type, as it applies to buying homes for sale in San Jacinto, CA.
Cash is still King - but it does not rule they dynasty of bank owned REO homes for sale like it once did. The kingdom is in trouble. While there is a CASH deal reported for 63.16% of the list price it is a 1926 fixer listed for $47,500 and had been on the market for the longest of any property that closed escrow during this period, with 539 DOM! The MEDIUM reduction from list price came in at 99.28% of list price on a home built in 2006 and listed at $129,900 and selling for $129,000. 13 of the 28 CASH Buyers paid 100% of List Price or more. The highest percentage was for a 1931 home on over an acre that was listed for $90,000 and sold for 125.42% of list price, or $112,875.
Conventional Financing that typically has a large cash down payment was also able to keep the Average Sold Price under the asking price - but not by much. The Average List Price for all 35 homes that sold with conventional financing was $133,540 and it sold, on average, for $131,744 or 98.65% of List Price. The Medium LP/SP sale was for 100% of List Price and was one of nine that sold for full pop and not counting the 12 more homes that sold for OVER full asking price.
The most common financing for homes in San Jacinto is the government sponsored FHA Program that allows an owner occupied purchase to buy a home with as little as 3.5% down. The homes that sold with this program were perhaps the most competitive as they sold, on average for 100.78% of the list price of $142,408 for $143,525. What I find very interesting is that the MEDIUM LP/SP is actually over the Average at 101.67%. On the low side there are 4 homes that sold for less than 90% of List Price and include a Probate and a Short Sale as well as a REO that had been on the market for over 4 months. On the high side there was a 1973 home listed at $89,900 and sold for 119.58% of list price at $107,500. 21 of the 67 homes that Sold with FHA Financing sold for under list price.
VA Financing is, of course, another government program. What I find interesting is that it is rarely used yet the sellers should be thrilled to accept VA offers, despite the need for minimal condition standards as the homes ALL Closed for 100% or more of list price. The MEDIUM was 101.17% and the Average is 101.95% of List with the highest being a 2006 home that was listed for $135,900 and closed escrow for $144,000 - that's 105.96% of list price .
So ,for the buyer looking to stay under asking price you must realize that yes, the opportunity is still out there - but the amazing deals are few and far between today. Strong cash or conventional buyer today MUST take into account that less than 38% of homes closing escrow today are closing for less than full asking price. 15 each of the 51 below asking escrows closed with both Cash and Conventional financing, leaving 21 for FHA financing. To help spot the deals that can be had for less than asking, what these home typically have in common are the Days on Market (average 94), the age (average built in 1995) and size (average 2,026 sq ft / 3.56 BR - 2.14 BA on a typical 7,615 sq ft lot).
My personal belief is that anyone - owner occupant or investor who is looking to buy a home should focus on the home and not the price (so long as it is in the range you are looking in) and not get hooked on the macho aspect of being a good negotiator and only be able to prove your own self wealth by thumping your chest and claiming bragging rights that you were able to buy below market. Right now, is hopefully going to be the very best time in your life to buy a home. If you want to wait because you still think there is another flood coming - then wait. Just be prepared for the potential disappointment when we see that the banks are better controlling themselves and controlling the inventory and drive the price back up...that's what I expect as a student and active participant of this market.
BE SURE TO READ THE OTHER SEGMENTS OF THIS SPECIAL MARKET REPORT ON SOLD LISTINGS IN SAN JACINTO, CA
Blessings to all who read,
John Occhi, REALTOR®
Hemet - San Jacinto Valley
Servicing THE REO Needs of Asset Managers, Servicers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California. If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above phone number.
Serving California and Riverside County zip codes of 92501, 92503 , 92551, 92555 , 92562, 92563, 92504, 92505, 92557, 92553, 92506, 92507, 92590 92591, 92508, 92509, 92570, 92571, 92592, 92399 , 92584 , 92596, 92820 , 92571 , 92543, 92544, 92545, 92583, 92582, 92879, 92580 , 92530, 92532, 92881, 92882, 92567, 92518, 92883 , 92549, 92561, 92220, 92223, 92028, 92088