Dave Roberts

Searching with an iPhone for real estate listings in Sonoma County just got personal for me. My IDX vendor, IDXBroker, has released an iPhone app that lets me have my own self-branded iPhone app to search Sonoma real estate listings.

I've always been happy with my IDX vendor's great service but now they have provided me the bragging rights to share my own iPhone app with my clients. According to some of the reviews of this application, clients are happy that the listings are live and local. They compared this very favorably to the Trulia and Zillow applications which don't always have the most current data.

According to market statistics nearly half of all Internet mobile real estate searching is on the iPhone, so whether you have one or not, a lot of your clients might.

Sell it fast or sell it cheaper. Most real estate professionals understand the direct link between "Days on Market" and selling price. Homes that linger on the market for months normally drop their price to attract buyers or else accept a much reduced selling price. This is true in all regions of the country and all price brackets. Homes that have been on the market for more than 90 days rarely sell for full price.

I'm working with some out-of-state buyers who are new to Marin County and the North Bay and wanted to help them calibrate their pricing mindset. I produced this chart of all the single family homes in San Anselmo that have sold this year. The height of the bars indicates how close the sales price is to the original listing price. Most of the bars on the left side of the chart are near the 100% mark. Each bar represents one or more sales. As you read towards the middle (checking the bottom of the chart for the Days on Market) you start to see that many fewer homes are near the 100% mark. After Day 90, the highest value for selling price is only 90% of the original listing price. As you move to the far right of the chart near the six month DOM range, many homes are selling for less than 80% of their original listing price.

Armed with this type of information, my buyers are able to make informed offers that are backed by real market data.

REO Sales in Marin

I went out on a limb in April and said our local Sonoma County markets had bottomed out in late February. I don't get paid to write these predictions, so I don't have an editor to fire me. On the other hand, anyone who reads my work or listens to my advice should know whether my crystal ball (and spread sheet work) is clear.

I printed this chart and pointed out where the trend lines were bending upwards.

I have this more recent live chart below showing that as of late October of 2009 my earlier prediction about a late February housing bottom in Sonoma County is still showing up as a good predictor of price changes. Still, prognostication success aside, I'm not going to tempt fate and promise continuing improvement going into the slower selling season on both sides of the holidays.

I will mention that prices have moved up between $50K and $100K in this Santa Rosa zicpcode depending on the price range. We're nowhere near the peaks of the market and may not regain those for a very long time, but the smart buyers ( Dick Miller you know who you are) were able to act on my advice and purchase homes for very good values in the spring.

Families looking for good schools and friendly neighborhoods often look at Rohnert Park and Windsor, the two cities that bracket Santa Rosa on the south and north. Both are reasonably recent towns built during the last half of the last century. Windsor is slightly newer, but Rohnert Park has Sonoma State University and better proximity to Marin and San Francisco.

They have each struggled with the crash of the housing bubble and I wanted to look at the numbers to see the state of the market. I pulled all the sold listings from July through September of 2009 for single family homes selling for less than $300,000.

I was surprised most of all by the vitality of Rohnert Park. The transactions at the entry level of the market continue on a torrid pace of overbidding that makes it hard for first time buyers to compete. At the same time, however, it shows a very healthy interest in home ownership and investment.

What you see in this chart is an average overbid of about $13,000 in Rohnert Park, and an average underbid in Windsor of about -$4,000. Even though Windos starts off with a higher average listing price (in the less than $300,000 price range), the average selling price ends up higher in Rohnert Park. I don't think you can draw a lot of conclusions from this. If I were advising first time buyers on a limited budget where they should be looking at property, I might steer them to Windsor just to avoid getting into as many bidding wars.

What's Real in Real Estate?

REO transactions are real. It's just that for home owners and investors trying to sell their homes, the REO market has been the 800 pound gorilla squashing average sellers. Normal transactions have almost vanished from the market as buyers chase the bank owned home bargains they read about. We've been living with this in most markets for at least 18 months.

I'm happy to announce that in Sonoma County, CA, at least for now, the foreclosure properties that dominated the market for most of 2008 and 2009 are finally becoming a minority of transactions. In fact the new listings in the last thirty days in Sonoma County break out as:

• Normal Market Listings: 345 homes
• Short Sale Listings: 143 homes
• REO Listings: 133 homes

It's a welcome change for the 345 people who were able to list their property for sale in a market where REO listings now have less than 20% market share of new listings. Owners still have to price their homes properly, but they're not competing with the banks' asset managers nearly as often.

The chart shows the trend month by month since the start of 2008. REO reporting was sketchy in our MLS, so I don't think we captured much data for the first few months, but it was clear by July of last year that REO transactions were beginning to outnumber traditional sales. The trend accelerated from there, and by the end of 2008 and beginning of 2009, sales of bank owned properties outnumbered traditional sales by more than 2 to 1. The number of normal owner-to-buyer transactions was fewer than 100 per month in January and February of 2009.

By May of this year the ratio was back to 1 to 1 for REO sales vs. open market transactions. During the summer the trend away from REO domination of the market has continued and we now (early October) are looking at REO sales falling towards the 100 per month level. My headline about the "real" real estate market returning after long domination by REO properties is proven by the numbers.

Of course, all this can change. We have rumors of waves of foreclosed properties coming from Option ARMs and other financial instruments due for reset soon. We hear tales of ghost inventory of REO properties just waiting to be dumped on the market. We all know people who are defaulting month after month on their mortgages without bank action. It's nearly impossible to get a clear understanding of the REO market and why banks are not acting more aggressively. What I can say is that if I were a banker with a lot of potential REO properties on my hands, I would have been putting them on the market starting in late spring when buying interest intensified and the REO inventory was dropping.

Keep watching my reo sites to check for active listings of foreclosed property in Northern California areas you are interested in.

• Sonoma County REO Property
• Marin County REO Property
• Napa County REO Property
• Lake County REO Property
• Mendocino County REO Property
• Vallejo REO Property