Kevin McGinnis- Marin County Real Estate CA Realtor

We're a month into the 2nd quarter of 2009 and Novato home sales are picking up. Since the first of the year, there's been a hefty increase in buyer activity at many price points. Specifically, there's been a market surge for Novato properties priced up to $700,000.

The chart here represents pending sales, or homes that are in escrow. The main reason that the number of homes in escrow is an important indicator is that it represents today's news, whereas closed sales are yesterday's market.

Properties priced at $700,000 and below have seen a boom in activity as buyers finally are getting off the fence and snapping up some good deals. This is a good indication of a bottom forming. In January, the $0-$500,000 market was pretty hot, with 45% of single-family homes in escrow (that is by definition a 'sellers' market). But look at it now! As of last week, almost 58% of homes are pending - an almost 13% jump.

The biggest spike in activity, though, has been in the $500,000-$600,000 range. Pending sales have risen a whopping 21.5%, taking it from a neutral market to a sellers market. (Traditionally, when 0-25% of homes are pending it's considered a buyer's market; 25-40% is a neutral market favoring neither buyers nor sellers and 40% and above is a sellers market.) This is not a perfect system; think of it as a rough rule of thumb. For example, I would argue that buyers are in the driver's seat in the $1M-$1.5M range, even though pending sales numbers indicate it's a neutral market. More on luxury below.

The $600,000-$700,000 range has really perked up too. In late January, 27% of homes were in escrow. Last week, that number had jumped by 17% to 44% pending. Even the $700,000-$800,000 range, which has been seriously suffering, has come back to life a bit, up 14%.

As predicted, still in the dumps are homes priced between $800,000 and $1 million. This is an effect of the difficulty of getting jumbo loans (stiff requirements) and the dearth of move-up/move-around buyers. Only 8% of these homes are pending, down from January's meager 14%. If you are a buyer in this price range, you have a definite advantage.

As for the Novato luxury home market, defined here as $1M and above, there are qualified buyers out there ready to buy! I received six offers on a $1,125,000 home in Pointe Marin last month (pictured here). But the key is that these buyers - like all buyers today - are looking for a deal. And, they want to know there is value in their purchase in the short term. They already know home prices will appreciate in the next 3 to 5 years. They want to feel there is value in their purchase with regard to the next 8 to 12 months.

So, while the pending sales numbers show a neutral market for the $1M-$1.5M range, I believe buyers are still in the driver's seat. Sellers must price their homes aggressively (meaning at or slightly below market) if they want to sell today. And for sellers to get the most money for their home, they need to price it correctly from the start. I have some effective strategies for selling homes in this market, which I'm happy to share with you. Feel free to contact me.

If you'd like more information about the Marin County real estate market or your home's value, please contact me today! I'm happy to help. kmcginnis@fhallen.com or 415-899-9210

Home values continue to decline and with that, so should property taxes. It's the law, and Proposition 8 allows homeowners to petition their county governments to have them reduced.

Marin County lowered some property taxes in 2008, but as home prices fall, the County reductions simply have not kept pace.

Please join me Thursday, April 16 2009 in Novato for a property tax reduction party! I'll run the recent comparable sales for your home and submit the information to the County for possible adjustment.

This is a FREE service.

What: Property Tax Reduction Party

When: Thursday, April 16

Where: 2 E. Barberry Place in Novato (at Highland Dr.)

Time: 5pm-8pm

Questions: Kevin McGinnis - 899-9210 or kmcginnis@fhallen.com

For all your Marin County real estate needs, visit my website www.BestHomesMarin.com

I imagine you've heard over and over that it's a great time to buy real estate right now. And it is, for many reasons that I'll discuss in a minute. But I see a lot of people holding back and waiting... and waiting... and waiting... until inevitably at some some point, it will be too late unfortunately. It's not just that you will have missed the bottom in this market. In fact, that's secondary to the bigger point. What you will have missed is something even more important: your best opportunity in this market.

Why your best opportunity is now

Right now, there is a large inventory of homes and buyers have relatively little competition. Buyers essentially have their pick because there are so many fewer buyers than sellers. When you as a buyer have your pick, you have the luxury of choosing the "A" properties - the cream of the crop, the best ones.

Besides excellent selection, prices are low. Foreclosures are bringing down all home prices in a neighborhood, so even "regular" sales are impacted. What's more, interest rates are low, you can buy a home with just 3.5% down and the government is throwing incentives at home buyers (more on that below).

This is a very rosy picture! So why are many buyers holding off? It's pretty simple: fear of making the wrong decision, of buying 'too soon,' afraid they'll buy and the market will fall further and they'll be played the fool. I totally get this. These are uncertain times. But here's why this way of thinking may cause you to lose out.

You cannot sharpshoot the market

By definition, we don't know when the market has hit rock bottom until prices are already on their way back up, 3-6 months after the fact. And then, it'll be too late to seize the opportunity that exists today.

Once there is word that we've hit bottom (again, 3-6 months after it has happened), all the buyers who have been sitting on the fence will rush to buy, trying to get in while they can. There is a lot of pent-up demand out there. And at that point, you as a buyer will suddenly have lots of competition, and everyone will be bidding on the same five houses (like they were three years ago). Prices will get bid up, maybe out of your range, and you'll be left with only the "B" properties - the less desirable ones. You've missed your prime opportunity.

Where is the bottom? No one knows, and there is no such thing as sharpshooting the bottom of the market. As a buyer, what you want to do is "buy in the low." No doubt, we are in the low, especially in Marin County (this isn't the Central Valley where there is a glut of foreclosures).

Incentives to buy: money in your hand

Buy a home this year, and you may qualify for cash back from the government! It's true, and there are two tax credit incentives out there: one from the federal government and one from the state of California.

The federal government is offering an $8,000 tax credit to first-time home buyers between now and December 1. ("First-time" buyer means you haven't owned a primary home within the last 3 years.) A tax credit is much more valuable than a tax deduction. A credit reduces, dollar for dollar, the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable.

Also, the state of California announced in late February that it is offering a brand new $10,000 tax credit to buyers of new, unoccupied houses in California. It applies to purchases made between March 1, 2009 and March 1, 2010. (The new condos at The Millworks in Novato qualify for this, by the way!)

Unlike the federal credit, the CA tax credit applies to both first-time AND move-up buyers. But take note:
The credit is on a first come, first served basis and there's only enough money in the program for about the first 10,000 new homes.

The way it works? Buyers will get up to $3,333 off their taxes for each of the first three years after buying.

You don't need a ton of cash to buy

With FHA loans from the federal government, you only need to put 3.5% cash down on your home purchase. New FHA loan limits for a single-family home in Marin County are $729,750. What's more, closing costs can be rolled into the loan as well. For more information, contact me.

So, opportunities abound for buyers in 2009! Let's go find you a great deal on a house!

Feel free to search all homes on my website, www.BestHomesMarin.com I compile a daily list of foreclosures, among other things.

I work with a lot of people who are either wanting to buy or sell distressed properties in Marin County. If you're a seller, this can be a very difficult time in your life. You do have some options, though, to help avoid foreclosure and minimize damage to your credit. I can provide guidance, just contact me at (415) 725-1911 or kmcginnis@fhallen.com Or visit my website, www.BestHomesMarin.com

The silver lining in the current housing situation is on the buying side. Some of the best deals in today's Marin County marketplace lie with two types of properties: foreclosures and short sales. These are both distressed properties, but they are different from each other.

FORECLOSURES

What is a foreclosure?

A foreclosure is a home that is owned by the bank. A bank takes possession of a home after the owner has missed several mortgage payments. Bank properties are also called REO, or real estate owned by the lender. Buyers can often purchase REO homes for less than what the bank is owed on the property, and that is why they are so desirable among savvy buyers.

How are foreclosures priced?

Banks look at comparable sales in the neighborhood and often price their REO very competitively; often just below market value. Banks are not in the "home ownership" business, and they want all these foreclosures off their books and quickly.

When a foreclosure is priced just below market value, it's likely to get multiple offers. But don't despair! These are not the crazy, "over-the-top" multiple offers of 2003-2006. Right now, buyers who are in the game (are pre-approved for a loan and are actively looking to buy) have a lot of selection, and even "hot" properties are only selling for the asking price or just slightly more on average. Since January 1^st of this year, 19 REO homes have sold in Novato (condo and single family). On average, these homes sold for 95.86% of their asking price.

Also, not all Marin County REOs are priced super well. So, you can still get them for less than the asking price in many cases.

If there are multiple offers, the bank may throw out all but two offers and then ask the selected buyers to resubmit what is called a "Highest and Best" offer. Or, the bank may simply accept the best offer from the start.

How can I have the winning offer?

Here are a few tips to help you select the right price and terms on any REO property:

1) Get the property history. As your agent, I look up what the bank is owed on the home. This can be a good indicator of what the bank will accept.

2) Look at comparable sales. A home's asking price can be very different from the home's actual value. The indicator of value of is what a buyer is willing to pay, and that can be determined by looking at recent sales of similar homes in the neighborhood. I will run the numbers for you to see what the home is "worth."

3) Find out the level of interest in the home. Are there other offers? If not, then you can usually feel comfortable submitting a lower offer. Before my clients write an offer, I always find out from the listing agent whether there are other offers, and if so, I can get a sense of what it will take to ‘win' the house. There are other ways than price to strengthen an offer, such as shortening an inspection period, putting more money down, etc.

4) Get the "right" pre-approval letter: Get pre-approved by the lender who owns the property. Do not expect to use this lender for your loan, but submit the pre-approval letter from this lender, along with the letter from your own lender. I can help you with this if it's necessary for any particular property.

5) Don't ask for repairs. Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.

I have other ideas, too, about how to help you buy a Marin County foreclosure property as smoothly as possible. Contact me if you want to see some Steals and Deals! kmcginnis@fhallen.com or (415) 725-1911

SHORT SALES

What is a short sale?

A short sale occurs when a homeowner needs to move, but they are "upside down" in their home, meaning their house is worth less than what they owe on their mortgage. Under a short sale, a lender must agree to accept less than the amount that is owed on the property.

Unlike a foreclosure, buyers typically buy the home for even less because they're not paying off the existing loan nor making up the back payments. Buyers are striking a deal with the existing lender to take less than what the lender has coming to avoid dealing with a foreclosure.

Short sales can require patience from a buyer. It can take 2-3 months to complete a short sale transaction, although in many cases now, it is faster. Sometimes the bank will have "approved" a sale price, and that moves the process along.

I am experienced on both ends of short sales, so I can help you get a great deal on one of these homes. I can send you some available short sales, just email me! kmcginnis@fhallen.com

SEARCH ALL HOMES, including a daily foreclosures list: www.BestHomesMarin.com

The "Real" State of Real Estate: A FREE Seminar detailing what you need to know about the Novato Real Estate market in 2009

Date: Saturday January 31, 2009
Time: 11:00-12:30
Location: Optimal Learning Ceenter
120 Landing Ct. Novato (off Redwood Bl.)

Good time to buy? Low rates enticing buyers? How will the Hwy 101 project affect home sales?

The headlines are full of mixed messages, generalizations and even bad information. We'll cut through the noise to bring you market realities, including why this is a unique time in history for Novato real estate.

Learn how the market affects you, whether you own, rent or may buy or sell in the future. PLUS: 5 ways to sell your house for more money in 2009.

Presented by Kevin McGinnis and Associates of Frank Howard Allen Realtors. Featured speakers include:
*Paul Hickman, Stewart Title Co. Division President
*Andy Shine, Residential Pacific Mortgage
*Public Information officer from Cal Trans
*Erin McGinnis, Picture it SOLD! Home Staging

Space is limited! Reserve your seat today! Call (415) 899-9210 or email kmcginnis@fhallen.com