Harold Penner

HAROLD PENNER: Fresno Real Estate Market Analysis
Tax Credit Extended!


The big real estate news this month is the extension of the federal tax credit for first-time home buyers from November 30, 2009 to April 30, 2010. A first time home buyer is defined as a buyer who has not owned a principal residence during the three-year period prior to the purchase.

Now even more interesting for many of my sellers/buyers is a new tax credit that was added for repeat buyers. Buyers who already own a home and have lived in the home for five consecutive years are eligible for up to a $6,500 tax credit on their next home purchase. Whether you are interested in moving up or downsizing from your current home, you qualify as long as the new home will be your future primary residence.

Click to Access More Information on Tax Credits

So, those are some incentives for buying, but the question I am often asked is whether now the right time to buy in Fresno and Clovis, California. Well, I prefer to let the numbers do the talking when it comes to answering that. There are certainly fewer choices of homes available today than a year ago. 5,010 homes were for sale in October 2008 in Fresno and Madera Counties. Today the number of active properties averages around 2,500. So, there are 50% fewer homes for sale today than a year ago. The primary reason for this is the reduction of foreclosures. The number of foreclosures for sale today have decreased by about by an astounding two-thirds since the beginning of the calendar year.

Many buyers may be waiting for those foreclosures to come back and flood the market with bargains thereby driving the overall price down. But, by looking at the statistics from this past year and by referencing the historical trends of the Fresno market, I don't anticipate any significant price drops. During the height of active foreclosures, the average selling price was $156,256 (January 2009). With 50% fewer homes to choose from the average pricing this year has inched up to $174,867 (October 2009).

Now, it's possible that if foreclosures returned with a vengeance, Fresno and Madera counties' prices would decrease. But, in the past year the demand for homes has also increased. First time home buyers have now seen prices that are affordable and within reach. Out of town investors have again returned to buy rental properties. The overall number of sales has been steadily increasing instead of decreasing.

So, in short, I am advising clients that with historically low loan rates, low prices and this newest tax credit extension this is truly an excellent time to buy.

OCTOBER MARKET STATISTICS* - Fresno and Madera Counties

• Average Price of Sold Homes in August '08 vs. '09 - $190,044 vs. $175,036 (8% Decrease)
  
• Sold Homes in August '08 vs. '09 -907 vs. 891 (2% Decrease)
  
• # of Foreclosures and Pre-Foreclosures Sold in August '08 vs. '09 - 595 vs. 577 (3% Decrease)
  
• Avg. Loan Percentage Rate in September 2009 - 4.83% (30 Year Fixed)
  
  *Unless otherwise indicated, all stats are based on residential sales in Fresno and Madera counties.

  Click here to visit HomesInFresno.com

FEATURED LISTING
2765 Rialto Avenue, Clovis, CA 93611

HAROLD PENNER: Fresno Real Estate Market Analysis
First Time Home Buyers - Cashing In!


Tax Credit Deadline Approaching!

The clock is ticking and the rush is on for first time home buyers to cash in on the $8000 federal tax credit. They must close escrow by November 30, 2009. With escrows typically lasting a minimum of 30 days, the next few weeks are critical for anyone interested in squeaking in before the deadline!

Here are a few of our recent clients that took advantage of these credits to buy their very first home!

"I wasn't even thinking about house hunting until I heard about that $8,000 tax credit," remarked first time home buyer Mike Bone. He had heard that Harold Penner was an agent with the connections and knowledge to get people into homes fast and thought he would see what was out there. Initially interested in only the 93710 and 93726 area but discouraged by having only fixer-uppers in his price range, the Penner Team steered Mike towards a Cambridge built home in Northwest Fresno near Polk and Herndon.

"I absolutely love the home and the neighborhood. It's hard to believe that this is all mine," says Mike. Still at a loss with how to fill 1,600 square feet of space, this bachelor is looking forward to spending some of that $8,000 on home improvement projects this winter.

Mike Bone relaxing at home in his kitchen!

AUGUST MARKET STATISTICS* - Fresno and Madera Counties

• Average Price of Sold Homes in August '08 vs. '09 - $213,590 vs. $176,874 (17% Decrease)
  
• Sold Homes in August '08 vs. '09 -779 vs. 829 (6% Increase)
  
• # of Foreclosures and Pre-Foreclosures Sold in August '08 vs. '09 - 453 vs. 601 (33% Increase)
  
• Avg. Loan Percentage Rate in September 2009 - 5.00% (30 Year Fixed)
  
  *Unless otherwise indicated, all stats are based on residential sales in Fresno and Madera counties.

  Click here to visit HomesInFresno.com

FEATURED LISTING
2676 E. Muncie Ave., Fresno, CA 93723

HAROLD PENNER: Fresno Real Estate Market Analysis
Appraisals in Fresno - Challenging Times


Appraisal Update

In May 2009, the "Home Valuation Code of Conduct" was adopted by all Freddie Mac and Fannie Mae backed loans (which accounts for over half of the loans in the United States). These regulations were created out of a concern that a lender who directly hires the appraiser for a property could unduly influence or pressure the appraiser to adjust the price. So, the government backed a new policy that appraisals must now be ordered through a third-party company in order to limit communication between the appraiser and the lender or realtor.

The act has had some negative consequences. Local lenders were previously able to choose their appraisers based on quality, knowledge and experience. Now the decision of who completes an appraisal is left to a national or regional appraisal company who often assigns the job to the lowest bidder regardless of experience and expertise. Additionally, many independent appraisers with years of experience in the local market now must join a third party company in order to continue to do business.

Here are some recent news stories covering this issue:

Daily Herald - Utah

Daily Press - Virginia

Detroit Free Press - Michigan


Fresno Market Conditions:

These regulations come at a time of change in Fresno/Clovis real estate which makes accurate appraisals all the more critical. In the past 3 months, the average price of sold homes, the speed of selling the home and the number of homes selling above the asking price have all inched up. One reason for this is that there are less homes available today than there were 3 months ago due to a decrease in the number of foreclosures. The other reason is qualified buyers taking advantage of current tax credits (only available until November 30, 2009) and low prices.

Here are the latest statistics for residential homes sold in Fresno and Madera Counties:

Average Selling Price
- All Homes - $167,346 (July 2009) vs. $155,875 (April 2009)
- Foreclosures Only - $130,899 (July 2009) vs. $123,477 (April 2009)

Days on Market
- All Homes - 50% sold in 1-30 Days (July 2009) vs. 30% (April 2009)
- Foreclosures Only - 61% sold 1-30 Days (July 2009) vs. 40% (April 2009)

Listing Price vs. Selling Price -
- All Homes - 101% over asking price (July 2009) vs. 99% (April 2009)
- Foreclosures - 105% over asking price (July 2009) vs. 100% (April 2009)

So, in other words, the majority of houses listed in Fresno and Madera counties are currently selling above asking price. This is especially true in north Fresno and Clovis as well as homes priced under $200,000.

Consequently, the latest challenge in Fresno real estate is not finding a buyer for a home but instead having the house appraise for the sold price. I have seen more and more cases of buyers involved in a bidding war for a house and then the sale being cancelled because a seller cannot afford to lower the purchase price to the appraised value. Or there have been more cases of sellers choosing to sell to a cash buyer for a lower price instead of a buyer with a conventional loan to avoid any appraisal concerns. This makes qualified appraisers all the more important.

JULY MARKET STATISTICS* - Fresno and Madera Counties

• Average Price of Sold Homes in July '08 vs. '09 - $224,822 vs. $167,374 (25% Decrease)
  
• Sold Homes in July '08 vs. '09 -773 vs. 953 (23% Increase)
  
• # of Foreclosures and Pre-Foreclosures Sold in July '08 vs. '09 - 371 vs. 639 (72% Increase)
  
• Avg. Loan Percentage Rate in August 2009 - 5.33% (30 Year Fixed)
  
  *Unless otherwise indicated, all stats are based on residential sales in Fresno and Madera counties.

  Click here to visit HomesInFresno.com

FEATURED LISTING
4665 N. Bryan Ave., Fresno, CA 93723

HAROLD PENNER: Fresno Real Estate Market Analysis
Holding Pattern in Fresno Real Estate


For the past few months, the local Fresno real estate market has been in a type of holding pattern. The number of active foreclosures reduced by over two-thirds in the past six months leveling out around 450 active foreclosures beginning in May 2009. Pricing in homes under $250,000 has been slightly rising, but overall the number of sold properties and the average pricing of those homes has remained relatively steady for the past 4 months.

There is plenty of chatter and predictions for when the flood of foreclosures will return. But, for now, one of the points for first time homebuyers to remember is that federal tax credits will only apply for homes purchased before November, 30, 2009. The reduction in foreclosures has meant increased competition for homes coming on the market. Buyers need to act fast and aggressively in order to get the homes they are interested in before they miss this window.

For sellers interested in taking advantage of this time, here are some suggestions for enhancing your home (excerpt from RealtyTimes.com):

1. Go green. Energy efficient products and household goods are attractive to buyers. Renovations or replacements that help make the house more energy efficient are popular. Things such as better insulation, replacing old windows, caulking, and adding skylights can increase value.

2. Crown molding and wider baseboards. Some homeowners are shy to experiment with this, especially if they live in a small home, but it can be very attractive in any size home. Wider baseboard. The measly baseboard that builders often use in tract homes doesn't draw attention. Adding a wider baseboard and a fresh coat of paint makes the room come to life. Also, framing windows and doors helps complete the look of a room.

3. Textured paint. Faux finishes, accented walls, or even just a little fresh paint on them makes a lasting impression. Choose colors and textures wisely. Don't get carried away with a color you love (e.g. purple walls-I've seen it in a home for sale). Remember, that you want your home to appeal to the masses. You can always paint your new home purple-and then change it when it comes time to sell it!

4. Improved flooring. Wood, tile, and new carpet can be a showstopper. But if the flooring is chipped, torn, or dirty, you'll get the opposite reaction from buyers. They'll think your home hasn't been cared for properly which could result in a lower offer -- or no sale at all.

Click to view complete article

JUNE MARKET STATISTICS* - Fresno and Madera Counties

• Average Price of Sold Homes in June '08 vs. '09 - $232,076 vs. $164,118 (30% Decrease)
  
• Sold Homes in June '08 vs. '09 -675 vs. 978 (45% Increase)
  
• # of Foreclosures and Pre-Foreclosures Sold in June '08 vs. '09 - 371 vs. 663 (79% Increase)
  
• Avg. Loan Percentage Rate in July 2009 - 5.13% (30 Year Fixed)
  
  *Unless otherwise indicated, all stats are based on residential sales in Fresno and Madera counties.

  Click here to visit HomesInFresno.com

FEATURED LISTING
2243 W. Magill Ave., Fresno, CA 93711