Richard Kitowski

Sacramento resale home market shows continued stability, but there are questions:

In the month of November there were 1,439 closed sales in Sacramento County, including the City of West Sacramento. this is 277 fewer closed sales than October, 2009. What tells of future closings are the Pending Sales, i.e., new escrows. In November there were 1,247 new escrows opened compared to 1,582 opened in October. this is a 21.1% decline from October to November. The tax credit extension was not announced until mid November so many of the pending sales in October were the result of buyers wanting to get their home purchase secured so they could qualify for the tax credit scheduled to end on December 1. this credit has now been extended to homes closed by June 30, 2010 and contracts entered into by April 30th.

What is an interesting trend is that the type of sale has changed dramatically in the past year. Last November REO (bank owned homes) were 71.2% of the closed sales, Short Sales were 11.5% and Conventional Sales were 17.1%. In November, 2009, REO sales were down to 40%, short Sales increased to 21.5% and Conventional increased to 38.3%.

The majority of the home sales continues to be under $400,000, 95.25% in November. Of the sales over $400,000, 2.5% were in the price range $400,000-$449,999. That leaves 2.25% of the total closed sales for November over $450,000. Price continues to be the huge factor in getting a home sold.

The unknown facts that will influence our market going into next year are:

1) Is there a shadow inventory of bank owned homes? If so, how large is this inventory.

2) Will the current rate of unemployment improve or stabilize?

3) Will the State of California continue with the 3-day furlough policy?

4) Will credit standards be more rigid for potential buyers?

5) Will interest rates increase when the Federal Government stops supporting our current low interest rates?

6) Will the current high delinquency rate among borrowers translate into more foreclosures and more bank owned homes?

These are questions that can be answered by Realtors who stay informed about market conditions and trends. For more detailed information please contact me at rkitowski@surewest.net or visit the web site http://www.stepseachday.com

Our goal is to provide professional real estate servies for home buyers and home sellers

Richard Kitowski

richard4homes.com

The Multiple Listing Service statistics were recently published for the month of October and the figures show a very stable residential real estate market. There were 1,716 closed sales for October contrasted with the 1,631 sales that closed in September, a 5.2% increase. Of the October closed sales, 713 (41.6%) were bank owned (REO), 356 (20.7%) short sales and 647 (37.7%) conventional sales. The bank owned sales continue a steady decline since the first of the year and the short sales and conventional sales continue to increase as a percentage of the total.

The median home price increased in October to $185,000 from the September median of $183,000. Over the past six months the median home price has been in the range of $180,000 to $190,000. This is continued evidence as to the stability of our current market.

The last two months of the year should be interesting in terms of sales volume. Now that the tax credit has been extended to April 30, with a 60-day extension if a binding contact is in place prior to the April deadline, the immediate pressure has been taken off of prospective home buyers to enter into a contract and get it closed the prior deadline of November 30th. Will prospective buyers take a breather and perhaps take more time in the home selection process? Only time will answer that question. With low interest rates and low home prices, now is certainly a great time to purchase a home.

Richard Kitowski

visit us at: stepseachday.com

In May of 2008 the Sacramento Assn of Realtors started showing the number of bank owned home sales as a part of the total home sales for Sacramento County and the City of West Sacramento. The May, 2008 statistical report showed that there were 1084 (65.5%) REO out of the total of 1654 single family home sales. From May through August the REO sales were running about 66% to 69% of the total for any given month. Beginning in September of 2008 the REO sales for the first time topped 70% and stayed in the 70% plus category through December 2008.

The graph shows what is happening in 2009. In January the REO were 75.7% of the total closed sales. In February the REO closed sales were 74.3%, March 70.5% and they are declining as a percentage of the total each month through September when the REO sales are 45.4% of the total. Is this a trend that will continue? Some people are saying that the banks are withholding homes to avoid flooding the market . The monthly statistics tell the accurate story. Bank owned homes in our region are becoming a smaller part of the total market. Will this trend continue? Time will tell.

Beginning in June 2009 the Sacramento Board of Realtors starting publishing the number of short sale closings as a part of the whole. In June of 2009 short sales were 16.6% of the total closed sales. In September 2009 short sales were 19.3% of the total closings. Is this a trend?? Watching the numbers will provide the answers.

Using graphs is a very effective way to tell a story quickly, so we are now using them as a visual aid to show what is happening in our marketplace.

Richard Kitowski

Visit us at stepseachday.com