Sonoma County, California--Home sales overall down over the past two years while the median, absent its free-fall, has been making strides over the past 5 months. The median year over year is up 10%. For the first time in recent memory my Broker Price Opinions, when concentrating on the Sub-$400,000 market I report "Stable--if not improving!". This is huge! We had regular months of 20-30% drops in the median.
I did a recent Broker Price Opinion and one question asked"When was the last sale of the subject property?" I check the count tax records and the price was $317,000, sales date May 2002. My BOP price came in at $289,900!! Gulp! Gasp!
We see the REO market down over 40% from last year at this time. Sales, compared to the low of two years ago, a paltry,meager 200+ units, is now hovering around 400-450 mark but REO/Short-Sales still accounting for 50%! Biggest month in Sales over the past two years? How about October 2007! 600+ units. What drove it? Yup! REO sales.
The Short Sale is prooving to be somewhat problematic (now That's an understatement but this is a family post!)! We have seen a doubling year to date over the amount of closings for this strange creature but nothing to really hang your hat on unit wise. Our biggest month ever for Short-Sales was July 09 with just a tad over 100 units. But we are now down around 65 but HEY! It's THAT time of the year for all sales to wane.
Our "under contract" statistic is bloated with "Short-Sales" that go in but NEVER come out. Many of us call Short-Sales--"REO Preview"!! Of the 890 continue to show properties IN ESCROW-575 are Short-Sales with an average time on the market of 160+ days! Now I know folks who get them done a lot shorter but I also know those agents and buyers waiting FOREVER!! 6+ months! How do you possibly structure a life around short-sales and their iffy outcomes? We've been hearing all sorts of gossip about a "more humane and friendly" disposition to these escrow but the light at the end of the tunnel appears to be a NEW TRAIN!!
Good news is my tracking of the "Normal" market--those NOT selling REO or Short-Sale. The sales for these folks is up a whopping 30% over last year. What's up with this? We've had 3 years of NO appreciation, huge drops in pricing, folks clinging to the theory, "My neighbors home went down in value--mine didn't!". Well after three years of this many folks, their lives having been put on perpetual hold, have decided to pull the trigger and just get on with their lives! Add the first time homebuyer's credit extension and the new "move-up" homebuyers credit and we are seeing a rebounding and awakening of this market. Their pricing is a bit "sticky" as many need to be led down the path kicking and screaming to a successful pricing strategy! The disparity between List price vs. Sales price is a big chasm! Education and paitience the best policy!
The best tool I find for this is "Foreclosure Radar". I pull up a map of their neighborhood and show them the action in the Pre-foreclosure, Auction and Bank Owned areas and they either see the light or must face the certainty down the road of competing with the big banks on price! And the chances of competing with the banks on price is slim to none and slim JUST LEFT TOWN!! I'm going to do a separate post on how to use Foreclosure Radar in the listing presentation. No stock in the company just a terrific tool for proper market pricing!
Don't forget to tune us in Sundays, 9 to 10am PST, "The Real Estate Hour", the NorthBay of San Francisco broadcasting to Marin, Sonoma, Clearlake, Mendocino,Napa, Contra Costa, Solano Counties for 15+ years. WWW.KSRO.comor locally on 1350AM,KSRO Mike Kelly and Allison Norman, "Two of Sonoma Counties Natural Resources".