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Coldwell Banker Realty Check — February 2012

JobandEconomy

From Kris Vogt, President, Coldwell Banker Sacramento/Lake Tahoe

With 2012 well underway, there are very encouraging signs that the nation’s economy and job market are finally starting to gain momentum. If this trend continues in the months ahead, it bodes well for the recovery in housing – both here in Northern California and around the country.The U.S. economy grew at a 2.8 percent annual rate in the final quarter of last year, according to figures released by the federal government this month. This level was a sharp increase from the third quarter’s 1.8 percent rate. And there are indications that the latest GDP figure could actually be revised higher due to wholesale inventories rising in December.

Even more encouraging for real estate is the fact that the labor market is steadily improving. Most analysts agree that in order to have a self-sustaining recovery in the housing market we must first have a significant turnaround in the job market. There are indications that could be happening at long last.

Initial weekly unemployment claims fell 15,000 to 358,000 in a new report by the Labor Department. An even better trend gauge — the four-week average — fell to its lowest level since April 2008, the period before the financial crisis. And the unemployment rate has fallen to a three-year low of 8.3 percent.

One other bullish indicator for the housing market is solid gains in the stock market, especially in the housing sector. The S&P index is up more than 7 percent so far this year (as of February 10) and up more than 16 percent since late November.

No one can predict, of course, where stocks go from here and it’s not unreasonable to assume they could continue to bounce around given the sovereign debt crisis in Europe. But the stock market gains certainly are helping all of our 401k portfolios and perhaps bolstering the confidence of potential homebuyers.

The housing industry has fared better than many stocks on Wall Street. While housing starts are expected to climb 15-20 percent this year, the stock prices for homebuilders themselves have spiked from 20 percent to as much as 134 percent since August, according to a recent story in USA Today.

“Talk is turning from when housing will hit bottom to whether it’s time to buy housing stocks and count on the sector to propel the economy again,” the USA Today said in its February 9 article Home builders and investors both see signs of a turn.

To be sure, the nation’s housing market is still facing a number of challenges, as USA Today pointed out, from tight credit to glut of bank owned properties in many markets. And the recent $25 billion settlement by the nation’s biggest mortgage banks could spur more foreclosures in the near term.

In a speech before the National Association of Home Builders, Federal Reserve Chairman Ben Bernanke cautioned that, “We need to continue to develop and implement policies that will help the housing sector get back on its feet.”

Bernanke argued that overly tight credit in mortgage markets could be holding back a strong rebound in the real estate sector. He called on lenders and regulators to look at rules and practices that may hold back the origination of sound mortgages. He also has championed a plan to convert foreclosed homes into rentals.

But despite the challenges, there is good reason to believe the housing market is gradually turning the corner in many areas.

For most of the country, the inventory of homes for sale actually is falling while sales volumes have been picking up since last year. And affordability levels for homeownership have never been better, thanks to historically low interest rates and attractive home pricing.

We’ve seen the improvement right here in Northern California. According to a new report by the California Association of Realtors, January home sales rose 4.4 percent in the Bay Area when compared with the figures from last year. There was a 10.6 percent increase in Santa Cruz County, a 4 percent increase in Sacramento County and a 3.5 percent increase in Placer County. Prices did ease 8.2 percent in Monterey County.

We continue to see growing demand by very serious buyers looking to purchase homes. And while some are scouring the landscape for bargain basement distressed properties, many are seeking good homes at fair prices. And there continues to be a very strong demand for properties in the middle and upper ends of the market, too.

The real problem we’re facing here in the Northern California isn’t a lack of buyers; it’s not enough sellers.

Many homeowners who would like to sell their homes have been sitting on the sidelines, still wrongly believing that the market is in the depths of a recession. They still fear that they will have to take drastic price cuts in order to sell. I’m afraid that the news hasn’t gotten out to them that things have changed for the better over the past year or two.

Sellers no longer must sell their properties at fire-sale prices to get buyers’ attention. In fact, fairly priced homes that are staged well and located in desirable neighborhoods are not only being sold relatively quickly these days, but in some cases with multiple offers.

So if you’ve been thinking about buying or selling a home, there may not be a better time than right now. For buyers, mortgage interest rates are still below 4 percent for many 30-year fixed-rate loans and pricing is attractive in many neighborhoods. For sellers, there are scores of well-qualified buyers ready to purchase your home at reasonable prices.

No one knows what the future holds, but as the economy and the job market continue to gain momentum, there’s every reason to believe that the housing market will follow suit as well. A professional Realtor can help you decide if now is the right time for you to market your property or to find the next home of your dreams.

Start building your memories,
as you turn your house into a home. 

This article was not written by Jack Edwards, as this blog notes automatically at the top of the page. I cannot change the automatic notation at the top which is created by WordPress.  The article was written by Kris Vogt, President of Coldwell Banker Sacramento/Lake Tahoe.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow homeowners!
Be sure to follow us on Facebook at www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete blurb with it: Jack & Tracey Edwards, your real estate advocates, specialize in helping buyers and sellers in Elk Grove, CA,  and the greater Sacramento area.   Get information about available homes online at:  www.ElkGroveRealEstate.com.

 

The Great Recession and Attitudes Toward Home-Buying

Research Institute For Housing America:

Special Report

In the last few years, Americans have experienced the most severe housing-market downturn since the Great Depression. The national homeownership rate during this period has declined from a peak of 69 percent in 2004 to 66 percent presently. Unemployment is high, income growth is stagnant and home sales are low. Indeed, in this environment, many have questioned whether the American dream of homeownership has ended.

This report utilizes data from the University of Michigan’s Survey of Consumer Attitudes to examine consumer attitudes toward homeownership before, during and after the financial crisis. In particular, it measures the extent to which the recession has changed consumer sentiment toward home buying and selling.

There are a number of principal findings from the report which include:

• Despite high unemployment, slow economic growth and problems plaguing the economy, almost 80 percent of American households believe that now is a good time to buy a home.

• Positive sentiment is strong particularly among young, educated, white and Hispanic households, and is attributable to low house prices and low mortgage interest rates.

• The pattern of home-buying sentiment during the current recession looks similar to the pattern from past recessions. In fact, current positive home-buying sentiment is around its long-run average level.

• What is different about the current recession is that positive home-selling sentiment is at an historic low. Indeed, the sell-side of the market is dominated by deeply negative sentiment.

• Negative home-selling sentiment is strongly related to difficulty in finding buyers at desired sales prices, as well as the large overhang of mortgages past due or in foreclosure.

• Over the last two decades, the value of mortgage purchase originations has tracked home-selling sentiment more strongly than home-buying sentiment.

• Favorable sentiment and real activity in the housing and mortgage markets will be weighed down significantly until the overhang of troubled mortgages is cleared out.

• Over the next five quarters, positive home-buying sentiment is forecast to remain around current and long-run average levels. In contrast, positive home-selling sentiment is forecast to remain around current and historic-low levels. This suggests that selling sentiment and, hence, market activity, will remain sluggish in the near term.

Start building your memories,
as you turn your house into a home. 

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow homeowners!
Be sure to follow us on Facebook at www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete blurb with it: Jack & Tracey Edwards, your real estate advocates, specialize in helping buyers and sellers in Elk Grove, CA,  and the greater Sacramento area.   Get information about available homes online at:  www.ElkGroveRealEstate.comOur mobile clients can find us at Mobile.ElkGroveRealEstate.com

 

Coldwell Banker’s 12 Month Home Maintenance Guide

Don’t let deferred maintenance take over your home. Do a little maintenance each month to help keep your new house like new.

January – Decluttering and Organizing
• Take down, clean and store holiday ornaments, decorations and
exterior lights.
• Put away all of those holiday gifts.
• While you are making room for your new gifts, take the opportunity
to go through your closet and get rid of things you haven’t used for
a year.
• Do end-of-the-year accounting and set-up a file folder for the current
year’s taxes.

February – Bathrooms
• Remove and replace any worn or crumbling caulk or grout in and
around bathtubs, sinks and toilets.
• Vacuum bathroom vent fan covers.
• Clean faucet aerators and shower heads.
• Make sure your toilets are not running and are in good working
order. If it’s within your budget, consider replacing your old toilets
with newer, more efficient models—and check with your local water
company to see if they offer rebates.

March – Kitchen
• Clean the range-hood filter in your kitchen.
• Remove all the items from your cupboards and pantry. Wipe shelves
clean, check expiration dates on all products and toss anything old.
• Clean your refrigerator and oven.
• Don’t forget to move your household clocks forward on March 11
during Daylight Saving Time and test your smoke detector and
carbon monoxide batteries.

April – Yards
• Check your sprinkler systems to make sure they are working properly.
• Cut back any trees or branches that are touching the siding or roof.
• Clear out debris from under decks or porches.
• Clear out gutters and downspouts.

May – Bedroom and Closets
• Thoroughly clean all bedding (bedspread, blankets, sheets, mattress
protector). If you have a duvet insert, have it professionally cleaned.
• Change bedding for summer months, if desired.
• Go through your drawers and closets and donate old items that you
haven’t worn for a while.
• Rotate and flip mattress, if needed.

June – Windows
• Wash the inside and outside of your windows (once the rainy season
has stopped).
• Inspect and wash window and door screens and repair any with holes.
• Make sure all doors and locks are working properly and are in good
condition.
• Clean tracks and lubricate hinges.
• Clean drapes, dust blinds and shutters.

July – Paint
• Inspect the exterior of your home. Scrape, caulk and paint any wood
surfaces that have peeled or weathered.
• Inspect interior walls and ceilings for cracks or bulges, and patch
and paint as necessary.
• Clean and seal decks.

August – Vents and Filters
• Check and clean dryer vent, air conditioner, stove hood and room
fans.
• Keep heating and cooling vents clean and free from furniture and
draperies.

September – Seals
• Check the weather stripping around your windows and doors and
make any necessary repairs in preparation for the winter months.
• Make sure your refrigerator door seal is tight.
• Caulk any drafts in your basement, such as around your dryer vent.
• Make sure your roof is good condition and not missing any shingles,
tiles or slates.

October – Fireplace and Chimney
• If you have a fireplace, make sure you have the chimney checked
out by a professional chimney cleaner before starting the first fire.
• Be sure your fireplace tools are in good working order.
• Pull out your nonflammable rug and place it in front of the
fireplace.
• Once you start building fires, clean ashes out regularly but ensure
ashes have completely cooled before discarding.

November – Upholstery and Carpeting
• Vacuum all sofas and pillows.
• Spot clean all upholstery and carpeting.
• For extra cleaning, consider hiring a professional service to clean
your upholstery and carpeting.
• Don’t forget to move your household clocks back on November 4
when Daylight Saving Time ends and test your smoke detector and
carbon monoxide batteries.

December – Miscellaneous
• Clean your garage and get rid of anything you don’t use.
• Neatly organize all of your tools, garden equipment and appliances.
• Wander the house with a screwdriver and tighten screws on
drawers, doors and furniture.
• Make a list of any small repairs that need to be made. If needed,
go to your local hardware store and purchase the necessary items
to make your repairs.

©2012 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC.
An Equal Opportunity Company. Equal Housing Opportunity.
Each Coldwell Banker Residential Brokerage Office Is Owned And Operated by NRT LLC.

Start building your memories,
as you turn your house into a home. 

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow home owners!
Be sure to follow us on Facebook at www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete blurb with it: Jack & Tracey Edwards,  your real estate advocates, specialize in helping buyers and sellers in Elk Grove, CA  and the greater Sacramento area.   Get information about available homes online at:   www.ElkGroveRealEstate.com.

Coldwell Banker’s Realty Check

Economic and Political Headwinds Impact Housing Market in 2011

Written by Kris Vogt, President, Sacramento-Tahoe, Coldwell Banker

With the hustle and bustle of the holiday season at full swing, we can assume that the real estate market may not be at the forefront of everyone’s minds. That’s okay for some, but it is definitely one of the most important topics on our minds. Each year around this time I like to take a moment to reflect back on the past 12 months and, more importantly, to look ahead at what may happen in 2012.

 We can learn so much by examining market trends over the past year – the ups and downs of housing prices and sales volume, the impact of world events, and conflicting headlines. We can also assess which (if any) predictions from 2010 came true.

In this edition of Reality Check, we travel back through the year 2011 to concisely sum up what transpired this year and to look at what experts are saying may be in store for our local markets in 2012.

———————————————————————————————-

Leslie Appleton Young, the chief economist for the California Association of Realtors, recently noted that all that California’s real estate market really needs to right itself is six straight months with no surprises. All the ingredients for a turnaround are there — record low interest rates, outstanding affordability, and very attractive home prices. But economic and political headwinds at home and abroad kept the market from really gaining much momentum this year.

To be sure, 2011 was anything but predictable. On top of the tepid economic recovery here in the U.S., there was one crisis after another around the world — the Japanese Earthquake and Tsunami, the “Arab Spring” uprising, a spike in oil prices, political standoffs on Capital Hill, the debt limit ceiling and downgrade of U.S. debt, and most recently the sovereign debt crisis in the eurozone and the subsequent stock market volatility here at home.

While California’s real estate market did show some encouraging signs of improvement in certain price segments and communities, skittish consumer confidence, the sluggish economy, stubbornly high unemployment and volatile financial markets all combined to keep home prices and sales flat in most areas.

Locally, The Sacramento Bee reported on November 17 that home sales in the Sacramento region in October — the most recent figures available — jumped 19.6 percent from a year ago, according to research by DataQuick, the La Jolla real estate information firm. But the median price edged lower as distressed home sales continued to be the lion’s share of the market.

The median sale price in Sacramento County was down 8.2 percent to $157,000, according to The Bee. Placer County saw the median drop 12 percent to $252,000. In El Dorado County, the median was down 12.2 percent to $230,000. And in Yolo County it was off 14.6 percent to $194,750.

The California Association of Realtors, in its annual forecast predicts that home sales in California will rise just 1 percent in the coming year. But as we know, real estate is really all about location. And in this challenging housing market, it’s also a matter of price segments.

Locally, entry level homes and distressed properties continue to see robust sales in many areas as bargain hunters rush to take advantage of attractive prices and, of course, low interest rates. As a result, we actually have seen inventory drop sharply this year to the lowest level in about two years.

Market wide, we are down to 4.2 months supply of homes on the market, according to MLS figures — a 31 percent decline year over year. At the same time, sales year over year market wide were up 16 percent. That trend, if it continues, could be very positive for the market and help it move back towards normalcy.

Distressed vs. Luxury Markets
One trend we’ve noticed of late is a drop in the number of bank-owned properties that are listed for sale and an increase in short sales. The reason may be that government regulations and controversies over “robo-signing” have kept more foreclosures from coming on the market. As banks put the robo-signing debacle behind them, we may see more REO properties released in 2012.

While the release of additional distressed properties could keep prices of all homes down in 2012, we suspect that strong demand by investors for these homes will probably keep prices from falling much further. We’ve seen multiple offers for many bank-owned properties, sometimes all cash offers, as investors snap up what they believe to be great bargains.

On the other end of the spectrum, the high-end market saw solid buying throughout much of 2011. But in recent weeks we have seen that interest decline, with sales dropping 8 percent in September and inventory levels rising 2 percent from the previous month.

Non-distressed mid-market
Homes that are somewhere between distressed and luxury properties – the bulk of the market here in Northern California – probably were the most challenged in 2011. One big reason for the softness is that we didn’t see very many move-up buyers trading their entry-level homes for larger, more expensive properties as they have traditionally done in the past.

Equity homeowners stayed on the sidelines, perhaps due to a lack of confidence in the housing market and the economy in general. They may have been frightened away by doom and gloom news headlines about the housing market, or maybe fear over whether they might lose their job should the economy stumble again.

This uncertainty and lack of confidence, I suspect, will continue to some degree into 2012 until there is more positive improvement in the economy.

But as we approach the new year there are glimmers of hope that the housing recovery could finally gain some traction.

Gradually we’re seeing fewer distressed sales and more “normal” transactions. Despite the recent downturn, the high-end market had a solid year in 2011, which is a good sign for the entire market.

In the past, luxury homebuyers – the so-called “smart money” – are often the first to declare a market bottom and jump back in because they have the means to do so once they are convinced the time is right. The other segments eventually follow.

Buyers are far more active right now and that, coupled with tight inventories, is helping to firm up pricing while getting serious buyers to be a little more realistic when making offers–especially in the entry-level arena. Properties priced correctly and that show well are getting a tremendous amount of traffic as well as multiple offers in some cases.

Additionally, we are finally seeing many banks starting to process short sales in a more streamlined fashion, allowing us quicker short sale approvals.

Finally, the news media are starting to join the chorus suggesting a turnaround is near and that now is the time to get back into the housing market. A recent Fortune magazine article declared, “Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.” And The Wall Street Journal followed with a headline declaring, “It’s Time to buy that House.”

So, will 2012 usher in a steady, predictable economic recovery at long last or another wild rollercoaster ride of economic and political surprises? Only time will tell how it all plays out. Fasten your seat belts!

Start building your memories,
as you turn your house into a home.

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office. I hope it has been of value to you. Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow home owners!
Be sure to follow us on Facebook at  www.Facebook.com/ElkGroveRealEstate. For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

Make sure to click the Comment box below and share this article with your friends as well.

Coldwell Banker Realty Check for November 2011

Fortune Magazine and the Wall Street Journal: Time To Get Back Into Real Estate

Okay, I know many of us have been saying this for some time now, but when the news media starts saying it – well, I guess that makes people stand up and take notice. A number of recent articles in the national press are now saying that it might be the right time for consumers, who have largely been on the sidelines, to jump back into the housing market.

I understand why potential buyers, whether first-timers or move-up buyers, remain cautious given all the economic headwinds and bad news out there. Economic growth has been slow, the jobless rate too high, and don’t even get me started about the politics in Washington, the euro-zone debt problems and the challenges facing Greece.

But I often urge buyers to examine what I like to call your “personal economy.” That is, if you have a steady job, reasonable credit, and enough savings for a solid down payment, you might want to take a deep breath and think about taking the leap into the housing market while prices and interest rates are so low.

Read what two of the nation’s top business publications, Fortune magazine and The Wall Street Journal, are telling their readers:

“Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”

– “Real estate: It’s time to buy again,” Fortune Magazine article by Shawn Tully.

“Two key measures now suggest it’s an excellent time to buy a house, either to live in for the long-term or for investment income.”

– “It’s Time to Buy that House,” The Wall Street Journal article by Jack Hough.

Tully in the Fortune piece interviewed Mike Castleman, founder and CEO of Metrostudy, who has spent more than 30 years tracking data on the inventory of new homes in the United States. Each quarter, inspectors go through 45,000 subdivisions from California to Maryland. According to Fortune, inspectors examine 5 million lots and record whether they contain a house under construction or completed.

What has Castleman observed? The glut of new homes that the U.S. had a few years ago at the peak of the market has rapidly disappeared. Instead, he told Tully that he has seen a rapidly declining inventory that could force prices higher. In the 41 cities Metrostudy looked at, there are just 78,000 houses vacant and for sale, or under construction – less than a quarter of the 343,000 units at the height of the market in 2006 and less than the total a decade ago.

“The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses,” Fortune quoted Castleman as saying. “And in most markets the price of new homes is fixin’ to rise, not fall.”

Metrostudy collects figures on the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all them to determine whether individual markets have a surplus or a shortage of homes. “If we had anything like normal levels of buying, those houses would sell in 2½ months,” Castleman told Fortune. “We’d see an incredible shortage. And that’s where we’re heading.”

Fortune says that consumers may be confused by conflicting news reports on the housing market, and that could be impacting their confidence in buying a home. On one hand, housing affordability has never been better. But on the other hand, they continue to see housing starts falling and home prices still heading down in some markets.

Tully said economists Robert Shiller and Karl Case, authors of the S&P/Case-Shiller Home Price indices, have different views about where we are in the cycle. While Shiller remains pessimistic, Case is more optimistic that things are starting to turn around, telling Fortune that “the lack of new home building is a huge help that a lot of people are ignoring.”

In its analysis of the housing market, Fortune noted that it’s important to look at the economic fundamentals of home ownership to see where the market is headed. As home prices rose sharply over the past decade, Tully said the magazine warned that a bubble was forming due to the level of new construction and the cost of owning a home compared to renting one.

“Eventually reality set in, and prices plummeted,” Tully said. “Our current view focuses on those same fundamentals — only now they’re pointing in the opposite direction,” Fortune noted. “So let’s state it simply and forcibly: Housing is back.”

The Fortune article said what will drive the recovery of the housing market is a sharp drop in new home construction, as noted in the Metrostudy research, as well as a big drop in home prices. Home prices have fallen about 30% nationwide since 2006, Fortune said, and more than 50 percent in hardest hit markets. With unusually high affordability levels, the article noted, Americans will start returning to the market.

While no one can predict with certainty the future of home prices and sales volume, it is safe to say that a turnaround will eventually happen. Timing the market is very difficult because you will never know the absolute bottom until prices have started going back up again. My advice is to look closely at your own “personal economy” and talk with a professional Realtor to see if now might be a good time for you to take advantage of low prices and rates, and join others in taking the plunge into buying a home.

Thanks for Reading,

Kris Vogt, Coldwell Banker

Start building your memories,
as you turn your house into a home. 

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow home owners!
Be sure to follow us on Facebook at  www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

Make sure to click the Comment box below and share this article with your friends as well.