What type of “Loan” are you seeing in your market place? Dominant government loans? Cash? Conventional?
Here in the lovely "Wine Country" of the North Bay just above the "Golden Gate", our median home price is $592,000 based on sales of “Detached Single Family” homes. We report on condo/PUD sales in a separate report. I’ve been tracking the “blend” of loans being made by searching “Terms of sale” through our MLS for the sales made the previous month. In September Sonoma County had 422 total sales of Detached Single Family dwellings and another 54 of Condos/PUDs (Planned Unit Developments).
Of those 422 sales we closed a total of 257 “Conventional” loans (Fannie/Freddie) or 62% of the sales for September. The second most category is “Cash” transactions at 88 or 21% of our total sales. This has been historically higher as during the REO/Short-Sale dominated market cash transactions hit 35%. My lender friends shudder at the mere mention of “Cash”! Coming in third are FHA loans with a total of 33 loans or 8%. VA loans come in last with only 15 for the month or 3.5%. The balance of loans are mostly “private” or “Seller” financing.
Struggles for our market? Scarcity of homes for sale. As of this writing we have a total of 781 “Active or Showable” listings for a population of 480,000. Marin County to the south is ½ that. Our new normal is low inventory and low sales with a steadily increasing median home price at 8-9% annually. Add to this our lack of affordability, (29% can afford the Median Home price in our County) and a big median home price.
Many of our consumers feel they need a big down payment to purchase a home. As Realtors I feel we need to constantly promote and make the consumer aware of low-down payment programs such as FHA or VA and other 3% down scenario loans. If I have a clean pest report on a home I’ll immediately consider an FHA or VA buyer. Many of my homeowners will take a future homeowner over an investor or cash offer.
So how does your market compare to Sonoma County, California? We are considered the “Bargain basement” for the 7 bay area counties. Marin County, between Sonoma and the “Golden Gate” has a median home sales price of $1,191,500 but they only closed 146 sales of Detached SFD’s in September. San Francisco is staggering as is the east bay and the peninsula. What are you seeing in your marketplace?