Current State of the Real Estate Market in Crescent City/Del Norte County - 9/15/10

I usually do a market report each month. I really don't feel like doing one for August. July had six sales, six! August had 19 and wow, 2 of those homes sold for over $300,000 so if I do a market report, everyone will get all excited and say, "See, things are getting better." Well, so far this month--September--4 homes have sold and the highest priced home was $92,000 and we're halfway through the month.

EVERYDAY I get a phone call from a friend or client who can no longer afford their home and either has to do a short sale or is letting the home go to foreclosure. There are currently 290 residential listings active on the MLS. At the current rate of 16 sales a month for the year, we have an absorption rate of 18 months. The absorption rate is how long it would take to sell all current inventory at the current sales rate.

42% of 2010 sales have been foreclosures, although they generally comprise about 15 to 20% of the listings. REO's (foreclosures) are usually listed below market price and fly off the shelf. To compete, neighboring homes that are for sale need to be priced competitively, not something very many homeowner's want to do...compete with a bank trying to unload a home in 30 days or less. It can be distressing for a home seller located right next door to a foreclosure.

As a rule, foreclosure listings are not in too good of shape giving the owner/occupant home seller the advantage of having a turn key home for sale for the non-fixer-upper type home buyer. This means however, your home needs to be in good shape, have some plants out front, good curb appeal, clean inside and smell nice; in other words, move-in ready. That is the advantage a home seller is going to have over most banks who want to sell "as is," whenever possible.

If you are a homeowner who needs to sell but you are upside down in your equity, your home is worth less than you owe, then you may want to consider a short sale. It is still a ding on your credit, but the word on the street is that a short sale adversely affects your credit for 2 years, at least in getting another Fannie or Freddie loan, versus 7 years for homeowners with a foreclosure on the credit record.

One more thing, if any readers know of anyone who has successfully completed a loan modification would you please say so in the comments of this blog. I don't know anyone personally who has made it through that mine field. In fact the folks I know who are in the process have been stuck in "loan mod hell" for over a year so it would be good to hear if there are actually people who exist, real people, not fake names the bank makes up, that can vouch for the loan mod process.

Homeowners in other areas of California would love to be able to say their home has "only" dropped 35% in value, however if you take into account the largest employer in Del Norte County has cut the largest pool of homeowners wages by 15 to 25%, it makes for stressful times for a whole lot of people.

Go out and vote in November!