Jeff Engle EnglePropertiesOnline

Hi Neighbors,

Leslie Appleton-Young, California Association of Realtor's Chief Economist released the 2010 California Real Estate Market Forecast. In that:

The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to C.A.R.'s "2010 California Housing Market Forecast," presented today at CALIFORNIA REALTOR® EXPO 2009 in San Jose. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009

The report has some regional data in it. For example the peak of the housing market for the Sacramento Region was August 2005 where the median priced home was valued at $394,450. August shows that median price to be $192,050 or down 51%.

NOTE: Real estate is a neighborhood market. For example, the report shows that Concord's median price was down 16% Year-To-Year while neighboring Walnut Creek saw 13% decline. Placer County has a whole for example has not been hit as hard as Sacramento County as a whole. But when you look at it neighborhood by neighborhood great variations exist.

Another interesting note is that for California almost 20% of the sales were All Cash, up from 8% in 1998. My first time home buyers sure saw this action in the under $250,000 homes! Competition has been fierce.

Hi Neighbors. Last weekend I was out with one of my buyers looking at new homes. One thing we noticed was a lack of 'incentives'. This is in line with this article published in thw Wall Street Journal:

Home builders are cutting back on the freebies they've been tacking on new homes for the last couple of years to woo buyers.

The reason is simple: Demand is almost back in sync with supply. According to Jeffrey Laverty, analyst with research firm Oscar Gruss & Son, new-home inventory has declined from 12.4 months in January to 7.3 in August, close to the six-month mark considered standard.

While eliminating incentives like free cars and free pools, some builders are continuing to offer to pay points on mortgages and discounts on upgrades-"Incentives that make sense," says Laura VanVelthoven, Hovnanian's corporate vice president of marketing and sales.

Source: The Wall Street Journal, Dawn Wotapka (10/05/2009)

There are still incentives, just not as much as there was a few months ago. As one salesman told me about the Pulte homes selling in Roseville is that they have kept their prices in line with demand and have not needed extra incentives. Good point! Check out the bottom line of what features you are getting and the total price for the product when you do your comparison shopping (often times not that easy with new homes).

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Hi Neighbors,

John Graham of Neighborly Financial has been gone the past several days helping a search and rescue effort in a nearby county.

From John:

I went to help search for the missing deer hunter in Calaveras County, last Wednesday. We spent all day looking for the subject. We were able to track his footsteps from the truck for about 7 miles, step by step, until darkness forced us to retreat for the night. Attached is a photo of the footprint we were following during the Calaveras County search. As of Friday, his location is still unknown. I have no details on the outcome, other than he is alive.

I am a member of the Placer County Sherriff's Search and Rescue team. We are recognized as one of the largest and better trained teams in the state, and therefore we get called out to assist with searches in many other counties. We assist with both backcountry and urban searches, for missing hikers, hunters, motorcycle riders, children and Alzheimer's patients. We also assist the Sherriff with evidence searches for criminal cases. We get called out about once or twice a month. Volunteers spend many hours training and in the field on searches. We all serve as ground searchers, willing to hike in any conditions and any terrain, but also we are divided into teams with specialties in 4WD, radio communications, motorcycles, mountain rescue, horses, and canine search, to name a few.

NICE work John. Another example of supporting our local community. We love doing it, just wish it wasn't a tough story.

Our thoughts go out to this family as they continue the search

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Hi Neighbors. The NAR (National Association of Realtor's) posted this excerpt of an article originally published in the Chicago Tribune. Neat tidbit to share:

More than 80 percent of new single-family homes have at least two bathrooms, which occupy an average of 300 square feet of floor space, or 12 percent of the total area, according to a study by the National Association of Home Builders.

The home builder's study reports a major return on value for extra bathrooms: "When the number of bathrooms is approximately equal to the number of bedrooms, an additional half-bath adds about 10 percent to the home's value, and one additional bath adds about 19 percent."

A mid-range bathroom remodel, which costs $10,500 on average nationwide, repays a home buyer at least 100 percent of the outlay when the property is sold, the home buyer study concludes.

Source: Chicago Tribune, Mike McClintock (09/21/2009)

Now is a great time to do some of those home improvements you have been thinking about.

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Hello Neighbors,

I attended this month's Finance Forum (meeting) at the Sacramento Association of Realtors branch office.

Interesting stuff.

A term we've been hearing more and more of recently was discussed..... "Shadow Inventory".

What is Shadow Inventory?

Homes that are in some sort of Notice of Default (NOD) or foreclosure proceedings... but haven't yet been taken back by the banks. Meaning? Homes that are vacant - or will be soon - that aren't yet being reported on the bank's financial books.

How much?

I heard an estimate this morning that shocked me: 35,000 - 40,000 homes in the "Greater Sacramento area". Now that area probably includes parts of Sacramento County, Placer County, and even El Dorado County. If those numbers are correct, it is a HUGE amount of homes that will some day come to market. If. If. If.

Impacts?

Obviously, if such numbers exist, that has huge macro-economic implications. Prices will drop. Banks will be in financial trouble. Buyers will benefit - if they can get loans. Sellers will have to hold tight for much longer, or compete with insanely low price points.

HOWEVER, there is a problem - accurate data.

No one has actually published the data we need to verify such speculation. Search MLS and you will find that there isn't much bank owned inventory now. It's dried up. You can search county tax records, but those tools aren't very user friendly. It would take days and days to compile such data. One industry professional says the inventory is there... another say the Obama plans have curbed the problem.

So?

We continue to listen. Speculation runs from all ends of the spectrum. If we had the data, we could guide you in the right direction. Until then, we (all of us in this industry) continue to be reactive instead of proactive.

I'm looking forward to changing that behavior.

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com