Oakland,CA: Bay Area home sales have dropped since December, but sales are still higher in early 2011 than they were during the same period in 2010, a real estate information service said.
Existing home sales track the number of Single family Homes, Town Homes, Condo’s and Co Ops. Each Month the National Association of Realtors receives data on existing-home sales from local associations/boards and multiple listing services (MLS) nationwide.
In January 2011 the NAR reported sales increasing from the previous year for three consecutive months. Existing-home sales in the West rose 7.9 percent to an annual level of 1.37 million in January and are 7.0 percent above January 2010. Distressed homes were 37 percent of the market share. Lawrence Yun, NAR chief economist, said the improvement is good but could be better.
“The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” Yun said. “The extremely favorable housing affordability conditions are a big factor, but buyers have been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”
All-cash sales rose to 32 percent in January from 29 percent in December and 26 percent in January 2010. All-cash purchases are at the highest level since NAR started measuring these purchases monthly in October 2008, when they accounted for 15 percent of the market. The average of all-cash deals was 20 percent in 2009, rising to 28 percent last year.
“Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes,” Yun said. Now this is good news for the economy but what does this news mean to the first time buyer using financing with high loan to values such as FHA or VA?
Well first of all it means it will be harder to get an accepted offer as all cash closes quicker and is not reliant on an appraisal so be prepared to be rejected by all cash offers.
This is not all bad new however; you just need to see this news for what it is. A lot of investors are buying these properties to flip. A lot of these properties that are on the market have a lot of major damage, neglect, vandalism, etc. These properties may never qualify for any kind of conventional, FHA and definitely not VA financing. These investors plan on renovating and renting or more likely selling these properties. So in a few months these properties will be back in the market, at a little higher price, yes, however at least they will be move-in ready for you!
We have seen a lot of home buyers using conventional and FHA financing get really frustrated with all cash offers in areas like Alameda, Berkeley, Oakland, and San Francisco because there are quite a few cash offers. It is very frustrating but, keep in mind the right property will be there for you when the time is right! To Apply Online with the Werdmuller Group Visit www.garrick.biz