Doug Reynolds

County continues steady sales, consistent median sales price since May

For the third straight month, Sacramento County records a Single-Family home median sales price of $180,000. After a jump from April to May (7.7%) the figure has remained unchanged. Unlike past years, the current summer season has not shown much of a surge in sales.

There were 1,848 single family home sales in July, a 6% increase from the 1,744 sales of June. Year-to-year, the current figure is 6.6% below the 1,979 sales recorded last July. REO sales decreased 3.5% month-to-month, from 940 in June to 908 this month. REO Sales made up 49% of the total sales while short sales (16.8%) and equity sales (34%) rounded out the remainder of the total sales. Compared with last month, the amount of REO sales has declined (3.5%), while short sales and equity sales have increased (6.9% and 22.8%, respectively).

The median sales price is unchanged month-to-month, keeping the $180,000 figure from both May and June. Compared year-to-year, the current figure is 16.9% below the $216,500 of July 2008. The Total Listing Inventory declined from 5,339 to 5,327, a .6% change. Compared with last year, the Total Listing Inventory has also decreased (32.4%) from 7,880 to the current 5,327 listings. The Housing Market Supply figure dipped 6.5% from 3.1 months in June to the current 2.9 months. Compared with last year, this figure is down 27% from the 3.9 months of inventory in July 2008. This figure represents the amount of time - in months - it would take to deplete the total listing inventory given the current rate of sales. According to MetroList® MLS Data, the average home spent 49.5 days on market (from the time it was listed to the time escrow was opened) and was 1,674 square feet. Of the 1,848 sales this month, 184 (9.9%) had 2 bedrooms or less, 990 (53.5%) contained 3 bedrooms, 529 (28.6%) were 4 bedroom properties and 145 (7.8%) boasted 5+ bedrooms.

Despite flat sales volumes and low prices, "the northern end of the central California valley (Elk Grove & Sacramento) is an area suggesting signs of an earlier recovery than other parts of the country," states SAR Immediate Past President Alan Wagner. "This area started to show signs of decreasing sales before other areas." SAR Secretary/Treasurer Doug Covill comments: "every area has its unique trends, but sales should be higher. The low inventory," continues Covill, "gives buyers fewer options and although many offers are being written, few are being accepted." This alludes to the so-called "shadow inventory" of vacant homes not yet listed. "Short sales and REOs, often at the lower end of the price spectrum, still dominate the market, bringing the county median price down artificially." A price breakdown of the single family home sales in July show over half of all sales (56.3%) are below $200,000. "Lenders still view the area as a declining market, resulting in aggressive pricing on short sale and REO properties and increasing the amount of lower-priced inventory," states Covill. The Sacramento area has seen a recent surge in new home sales, up nearly 40% from the previous quarter, according to the Sacramento Business Journal. This accounts for the largest increase of new home sales in two years. A $10,000 tax credit for new homebuyers has likely contributed to this encouraging growth, but applications stopped being accepted after July 2nd. Unless the credit is renewed, this fund will likely be expended in the next few months.

Doug's Take: Well, the stats continue to support what i'm seeing and reporting. Sales continue to stay strong with multiple offers over list price on many properties. Most buyers below $300k are finding it tough to get an offer accepted right now. One factor that is contributing to that is the looming end of the Federal tax credit for first time home buyers. Remember, you must CLOSE escrow by the end of November in order to be eligible for up to $8,000 tax credit. It will be interesting to watch and see what happens to the demand of homes once the credit expires. For now, it remains high!

clear skies,

doug

FHA Loans Set Record
The Federal Housing Administration guaranteed 186,000 mortgages in June, a record number in its 75-year history.

FHA loans are popular because they are one of the few sources of low downpayment mortgages. In the last year, they have accounted for about 46 percent of all mortgage applications.

Home Prices Increase in 22 Metro Areas
The 2.1 percent average rise in home prices in 22 out of 25 metropolitan statistical areas (MSAs) from April to May suggests that recovery could be at hand in many areas, says Radar Logic, a real estate data and analytics company.

"This is in stark contrast to the same period during 2008, when a decrease in the velocity of home price depreciation gave way to the worst loss in housing value in recent history," according to the report.

The report calculates that in the key MSAs it studies, prices have fallen 33.5 percent peak-to-trough and 31 percent peak-to-current.

NAR: Existing-Home Sales Rise Again
Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of REALTORS®.

Lawrence Yun, NAR chief economist, is hopeful about the gain.

"The increase in existing-home sales occurred in all major regions of the country," he says. "We expect a gradual uptrend in sales to continue due to tax-credit incentives and historically high affordability conditions."

Investors Drive Foreclosure Prices Up
Home shoppers in parts of the country with lots of foreclosures are finding it increasingly difficult to buy. Investors are bidding up prices thousands above the original asking price.

Federal legislation slowing the number of foreclosures is adding to the problem by reducing the number of homes on the market. For instance, in Las Vegas, one of the areas where the bidding problem is greatest, home inventories are down 10 percent since March, according to the Las Vegas Association of REALTORS®.

When a bidding war erupts, the problem is particularly difficult for traditional buyers because investors are usually cash purchasers. They can bid up a property without concern whether the appraisal will prevent them from getting a loan.

Experts say the problem is not unlike the situation at the height of the housing bubble.

"This market is about as abnormal as the hypermarket that we came out of a few years ago," says Jay Butler, director of the Realty Studies program at Arizona State University.

Housing Experts: Now Is a Perfect Time to Buy

Now is the time to buy, but that opportunity may be slipping away.

For people who have a job and money, a dream house is within reach, writes Marc Roth, founder of Home Warranty of America and a columnist for BusinessWeek.

He points out that mortgage rates remain low, prices are still at historic lows, and the government is offering incentives for first-time homebuyers.

He also adds that the inventory of homes to buy is still large, but it is shrinking. According to the NATIONAL ASSOCIATION OF REALTORS®, the housing inventory peaked in November 2008 at an 11-month supply. At the end of May 2009, it had fallen to a 9.6-month supply.

Roth says anyone who dallies will miss a good opportunity to buy a first home at a terrific price or go shopping for a move-up property that is a great buy.

Foreclosure Doesn't Have to Happen to You

Dear Homeowner,

If your home is at risk of foreclosure, you don't have to panic. There are many ways to ease the difficult situation and one may be right for you.

Sacramento has seen a recent spike in foreclosures and defaults. If you or someone you know is in this unfortunate situation or may be soon, now is the time to act. Below is information that explains the ins and outs of foreclosure, how you can avoid it and what your various options are.

As you will see, one of your options is a short sale. A short sale saves a homeowner from foreclosure and has less of an impact on their credit. Short sales typically only cost a homeowner their time but no money. I specialize in short sale transactions and am committed to helping homeowners avoid foreclosure. Using the extensive Prudential Real Estate network, I will market the property and work with the Seller's lender to get the sale approved.

Once again, you have options but if you are having trouble making your payments, you should act now. Being responsible and taking action now will cost you nothing and could save you a foreclosure. Call or email me today and I will discuss your options in more detail.

Clear skies,

Doug Reynolds

Prudential California Realty

When i refer to the left hand side of you screen, i am talking about my personal website, www.BuyWithDoug.com .  Feel free to visit for additional information about buying, selling, my background and more.  Looking forward to talking with you and discussing your real estate needs.

clear skies,

doug

Sales volume constant, median sales price unmoving, affordability climbs

Sacramento activity has remained relatively consistent for the past few months, showing slight increases in sales volume. After a significant increase from April to May (7.7%), the median sales price made no movement for the current month. Distressed properties still account for a large number of transactions and make up a majority of the listing inventory. New this month is the comparison between REO sales, short sales and equity sales.

There were 1,744 single family home sales in June, a .6% increase from the 1,733 sales of May. Year-to-year, there is a 7.4% decrease from the 1,883 sales recorded last June. REO sales decreased 10.4% month-to-month, from 1,050 in May to 940 in June. These 940 REO sales made up 54% of June sales. Short sales, on the other hand, have been on the rise. In May, short sales made up 14.5% of all sales with 251. Short sales accounted for 16.6% (290) of the 1,744 sales this month. Comparing the two months, there is a 15.5% increase from 251 to 290 short sales.

After a significant jump from April to May, the median sales price stayed $180,000 from May to June. Compared year-to-year, the $180,000 median sales price is 18.2% below the $220,000 median price of June 2008. The Total Listing Inventory increased from 5,063 to 5,339 listings, a 5.5% change. The current inventory, however, is still down 36.5% from the 8,414 listings of last June. This increase in inventory also increased the Housing Market Supply figure 6.9% from 2.9 months in May to the current 3.1 months. Compared with last year, this figure is down 31.1% from the 4.5 months of inventory in June 2008. This figure represents the amount of time - in months - it would take to deplete the total listing inventory given the current rate of sales. According to MetroList® MLS Data, the average home spent 50 days on market before selling and was 1,677 square feet.

Last month focused on the increase of cash-only purchases and how they, along with REO properties, have increased in the last year. This was attributed to the investors in the market who made a flurry of purchases as trends indicated a time at which maximum return was probable. There has also been steady increase in FHA loans. FHA loans are backed by recourse debt, requiring the borrower to take total responsibility of the loan and not rely on the property as collateral. This suggests more comfort among buyers and the financial confidence to keep payments current. Also, FHA loans are owner-occupied only, likely increasing neighborhood stabilization based on a homeowner's tendency toward property maintenance. The graph below represents the different types of financing used in June sales. Notice the decrease of conventional financing and the steady rise in FHA loans.

Condominium Resale Market

Sacramento condominium sales have decreased, down 10.8% from 130 in May to 116 this month. Compared with the previous year, sales are up 14.9% from the 101 units sold then. REO properties made up 44% (51) of all sales and short sales accounted for 18.1% (21) of the sales. Equity sales represented 37.9% (44) of the monthly sales. The condominium median sales price increased 6% month to month from $104,450 to $110,750. This current price is still down 19% from the $137,200 median sales price of June 2008.

Doug's Take: Well, same old, same old. More of the same thing we've been seeing and discussing over the past few months. Sales are remaining high, the median price stayed flat but is still up from the bottom in February, multiple offers on most properties, houses selling in a few short days and sometimes selling for over list price. The reason for those factors continues to be small inventory for the large amount of buyers to choose from. Another factor is the time frame for the Federal Tax Credit of up to $8,000 is quickly drawing near. Remember, you must close escrow by the end of November 2009 to be eligible for the first time buyer credit. This looming deadline is currently drawing many buyers off the sideline and into the mix. I expect July to continue with the same low inventory and high sales.

clear skies

doug