Is the Pendulum Swinging in YOUR favor?

 

In 2006 the pendulum swung hard from being a Seller’s market to a Buyer’s market. For the last six years, home values have plummeted and sales have been sluggish in most price ranges.

The funny thing about pendulums is they swing both ways and abruptly. In the spring of 2012, inventory levels in the Sacramento, Placer and El Dorado Counties began to decline. By the fall of 2012 they stood at less than a month supply of homes for sale in many areas in this region.  A recent article in Real Estate News gives Sacramento the distinction of leading the nation in this decline of inventory.

  “It’s been a buyers’ market for a while. Sellers have been reluctant to put their homes on the market,” says Steve Berkowitz, chief executive of Move Inc., which operates Realtor.com.  Berkowitz says; 

For-sale inventories dropped the most year-over-year in December 2012 in the following metros: 

• Sacramento, Calif.: -68%
• Stockton-Lodi, Calif.: -65%
• Oakland, Calif.: -64%
• San Jose, Calif.: -52%
• Seattle-Bellevue-Everett, Wash.: -45%
• San Francisco, Calif.: -43%
• Ventura, Calif.: -43%
• Riverside-San Bernardino, Calif.: -41%
• Los Angeles-Long Beach, Calif.: -40%
• Orange County, Calif.: -39%

It is note worthy to point out that 9 of the 10 steepest declines have been in California. Now, back to our local market.  Personally I do not see this problem going away anytime soon. To understand why I make this statement, we need to look at the underlining reasons for this decline.  Not necessarily in order of importance, here are the main forces driving this shift in the Marketplace in Roseville, Rocklin, Lincoln, Carmichael, Folsom, El Dorado Hills, Sacramento, Elk Grove and environs beyond.

1.      2012 saw the median price of homes sold in the Sacramento Region go up by 16%. Most predict prices to continue the upward climb in 2013. For many homeowners, they can do better staying in their home or renting it out and watch their investment grow faster and safer than investing in precious metals and with less risk than Wall Street.

2.      Foreclosures saw a 17.3% decrease nationwide and even most sever locally. With 50% of all homes sales during the last six years being bank owned foreclosures, this reduction has been a major factor in our inventory reduction.

3.      Banks are under heavy scrutiny from the government to work with homeowners on loan Modifications, principle reductions and loosening up the guidelines and approvals for short sales. These efforts have impacted the available inventory for sale greater than any other effort on the part of our regulators in Washington. Don’t get me wrong, this is a good thing. Keeping hard working families in their homes and schools is and should be a top priority.

4.      There are others, but the last reason I will give is buyer mania. With interest rates at historic lows and prices on the rise, the buyers have come out of the woodwork as the saying goes. If a property comes on the market and is fairly priced, it typically goes pending with multiple offers in the first couple of weeks. In fact, many new listings contain language to the affect saying, “home will stay on market for seven days, then all offers will be reviewed.”

In summary, if you were waiting for the market to bottom out, that ship has sailed. If you are a cash or conventional buyer, you stand a reasonable chance of being the winning bid. If you are a FHA or VA buyer, we can find you your dream home but it will be hard to acquire and most likely you will need to place several offers on various properties before your number comes up and viola, you are a happy homeowner. It is important to work with an agent who knows the area you are looking to buy in and has experience in how to write up an offer that will be accepted in a multiple offer situation.

If I can answer any questions for you, please call me at 916-316-4000 or email me kellygroth@grothhomes.com

Kelly Groth

Masters Club Realtor

www.grothhomes.com