Tag Archives: Home Value

Coldwell Banker Realty Check — May 2012

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With spring in full bloom, there is growing evidence that the nation’s housing market is shaking off its long hibernation and heating up once again. Several recent industry studies have shown that home prices are stabilizing across the country and that the U.S. housing market may have already begun a turnaround.

This comes as welcome news for buyers, homeowners and potential sellers. Some prospective buyers have been waiting for the “all-clear” signal that the downturn is over before jumping back into the market. And all homeowners, of course, have to be encouraged by stabilizing prices and signs that demand for real estate is accelerating once again.

One of the most followed analysts of the nation’s housing market issued a new report this month entitled: Housing Markets Stabilizing, Affordability at 40-Year High. The Fiserv Case-Shiller analysis of home price trends in more than 380 U.S. markets found that the majority either rose slightly year-over-year or had very modest declines -– the smallest since the housing recession began.

“Nearly all non-price metrics – existing home sales, rising home order volumes, increased spending on home improvement, a jump in multi-family construction – indicate that the housing sector hit bottom last year and has started along a path of slow recovery,” says David Stiff, chief economist, Fiserv.

Fiserv said the rebound in the market will be driven by investors who buy primarily in lower-cost markets, and then spread to the rest of the market segments. The firm expects that home prices, which it says generally lag sales activity by nine to 12 months, “will stabilize by the end of this summer and then rise at an annualized rate of 3.9 percent over the next five years.”

Nationwide, home prices are roughly 35 percent lower than their peak in the first quarter of 2006. Due to this “unprecedented decline and record-low mortgage rates,” Fiserv noted, “affordability has improved dramatically.”

The monthly payment for a median-priced home using a conventional 30-year mortgage now represents just 12 percent of median-family income – the lowest percentage on record (since 1971), the firm said.

Analysts at Fiserv say record-level affordability will eventually bring more first-time and trade-up buyers back into the housing market, especially as the cost of renting an apartment continues to increase and new households are formed. In many parts of the country, it is now actually cheaper to buy a median priced home and build up equity than to pay rent to a landlord each month!

No doubt the housing downturn and resulting drop in home equity were contributors to the recent recession. “However, very low prices have also started to draw in more buyers,” Fiserv said. “As demand for houses ramps up, construction activity will increase and residential investment will begin to make a substantial contribution to the recovery and GDP overall.”

Other widely followed industry analysts and media outlets are also growing more bullish on the housing market. For example, a recent Forbes magazine article declared, Home Prices Are Stabilizing, Signifying A Housing Market Bottom.

In the article, Forbes reporter Morgan Brennan says that data from a variety of research firms “reinforces a notion already asserted by many an economist, real estate agent and Wall Street Investor that 2012 is the year of the bottom.”

The law of supply and demand seems to be at work here. While the economy steadily improves and buyer demand grows, housing inventory levels have been steadily declining. Forbes reports that at the end of the first quarter this year, “there were 2.4 million existing homes on the market, nearly 22 percent less than last year.”

The shrinking inventory levels have actually led to bidding wars and upward pressure on prices in some areas. We’ve seen that in some parts of the Sacramento and Tahoe region, where attractively priced homes in good neighborhoods often attract three, five, or even more offers and often sell for over the asking price.

JP Morgan CEO Jamie Dimon, in his annual letter to investors, joined the chorus of housing market bulls. Dimon noted the dwindling supply of homes and condos for sale as one of nine reasons why he believes the housing market has reached a turning point.

As inventory of homes available for sale has been steadily declining, the U.S. population has grown by 3 million people per year since the housing crisis began four years ago, Dimon points out. At that growth rate, there would typically be a need for 1.2 million additional housing units, but builders are producing far fewer homes today.

As the job market continues to improve, demand for housing will quickly outpace supply, Dimon argues.

According to Forbes’ sources, completed home sales jumped 4.7 percent in the first quarter of 2012 and pending homes sales rose 12.8 percent since March 2011. Forbes reported that. “As inventory levels continue to tighten, a recovery, however nascent, can begin to materialize.”

Growing sales and a shortage of inventory are already having an impact on prices. The National Association of Realtors reported that in the first quarter of 2012, the median existing single-family home price rose in 74 of the 146 metro areas that the association follows. By comparison, in the fourth quarter of last year only 29 metro areas saw price increases.

Real estate research firm CoreLogic released data this month showing that home prices nationwide, including distressed sales, rose 0.6 percent from February to March for the first month-over-month increase since last summer.

Mark Fleming, the chief economist for CoreLogic has reported that “This spring the housing market is responding to an improving balance between real estate supply and demand, which is causing stabilization in house prices.”

While there have been signs of a balancing market the past couple of years, Fleming said the difference this year is that stabilization is occurring without the support of tax credits and in spite of fewer distressed sales.

So where does this all leave us? If you’ve been waiting for the “all-clear signal” to get into the market, the time may be here. While no one knows for sure when a turnaround happens until after it happens, there is growing evidence that the housing market has indeed begun to rebound.

If you’ve been thinking about taking advantage of record affordability and attractive home prices, now is the time. Coldwell Banker Residential Brokerage is ready to help you get into the home of your dreams while the market is still in your favor.

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 Realty Check — April 2012

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After several years of an oversupply of homes on the market and an undersupply of qualified buyers, the tables have turned for the Sacramento and North Lake Tahoe housing markets. It may be hard for some consumers to believe, but our local real estate market has bounced back in a big way over the past year. Eager buyers are once again out in force ready to purchase their next home. But ironically, the only thing stopping them is a serious shortage of homes for sale!

We’ve come a long ways from the recessionary days when homes sat on the market for many months or even a year or longer waiting for a buyer. Today, properties are once again being snapped up quickly, often with multiple offers due to the shortage of inventory. While this imbalance is frustrating some would-be buyers, it is also creating a great opportunity for savvy homeowners who have gotten the message that now may be the best time in many years to sell their home.

In the Lake Tahoe market, listing inventory for is down 25 percent from last year at this time. In parts of the greater Sacramento area, homes for sale are down even more – as much as 50 percent in some communities. This comes as the economy gains momentum and the job market and the financial markets improve – all providing more ready cash and incentives for buyers to purchase. The result is that there are more offers for good homes for sale. Sellers are getting higher prices and properties are moving faster than they have in years.

As a result of this shortage of homes for sale in Northern California, we are back to seeing offers with no contingencies in some cases, and buyers making offers on several properties before they actually get into contract on one. Multiple offers over the asking price by 10 percent or more is not unusual in some prime neighborhoods. In one extreme example, there were 62 offers on one property in Sacramento recently.

The Sacramento and Tahoe areas aren’t alone. According to the California Association of Realtors, the state’s overall housing inventory declined in February, with the unsold inventory index for existing, single-family detached homes decreasing to 5.3 months, down from a revised 5.7 months in January and down from the 7.5-month supply in February 2011. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

Adding to the strong buyer demand are record-low interest rates. Interest rates fell to historic lows again in April. Thirty-year fixed-rate mortgages averaged 3.87 percent, down more than 1 percent from a year ago, according to Bankrate.com. Fifteen year fixed rates dropped to 3.11 percent and adjustable-mortgage interest rates were 2.73 percent in April.

To be sure, the housing market is once again coming alive. Real estate agents are seeing 80-100 visitors at some open houses, multiple offers are no longer exception, but the rule in many communities, and buyers are showing a sense of urgency perhaps out of concern that record low interest rates could be heading higher before long. Some recent comments from our local managers:

  • One Elk Grove home received 33 offers while another had 20 offers after just one three-hour showing on a Saturday afternoon.
  • A home in El Dorado Hills listed at market value attracted 12 offers, some all cash. It sold for nearly 10 percent over the asking price and closed in 19 days.
  • Another home in Placerville, listed for more than what the agents thought market value to be, received seven offers, one all cash, and went pending for 10 percent over the list price.
  • The Tahoe market is beginning to experience multiple offers on properties that are appropriately priced for the market and typically for homes that are priced below $500,000.
  • Said one manager: “It doesn’t seem to matter if the price range is $250,000 or $750,000. A good house that can sell and close will get multiple offers.”

Sellers need to sense the same pent up demand, excitement and urgency in the market that buyers have sensed for the past year. They need to take the long postponed leap to list their homes for sale now.

Simply put, there just aren’t enough homes on the market to meet the tremendous demand from buyers. And this is true in all price segments, from small starter homes and condos right up to multi-million-dollar Previews properties.

The days of buyers being only interested in distressed properties at bargain basement prices are over. Homebuyers are pounding the pavement looking for good, well-maintained properties at fair prices in every segment of the housing market.

The real estate market has always come down to two simple factors: the law of supply and demand, and consumer confidence. Right now, both of those are creating a sellers’ market in the Sacramento and Tahoe area. Consumers are feeling more confident as the economy picks up steam and the stock market turns in strong gains in 2012. Clearly, the scales of supply and demand are tipping heavily in favor of sellers today.

Smart, strategic homeowners understand all this, and they’re making their moves right now – not six months or a year from now. They’re the ones getting multiple offers for their home because there just isn’t a lot of competition for buyers’ attention. They’re out there now, before everyone else joins the “house party” and tips the scales back in favor of buyers once again.

If you’ve been thinking about selling your home, now is the time. I’m happy to answer any questions you may have – and to help you get the very best possible price for your home while demand is so strong.

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

 

Should I Buy an Older Home or a Newer Home?

The best answer to that question, of course, is, it depends!!!

Since I just received a similar question from one of my clients, I figured that I should put together some real-time numbers before answering.

Her question was, “How much more does a newer resale home cost than an older home?”

Graphic of homesSo, I looked up sales in the past 6 months for 3 bedroom, 2 bath homes that were built between 1987 and 1999 in the Laguna Creek neighborhood of Elk Grove, California.  A simple market analysis of these homes showed that the average home was about 1,448 square feet in size and that the average sales price was about $159,000.  Therefore, the average price per square foot was about $110.

Then, I looked up the sales in the past 6 months in the East Franklin neighborhood of Elk Grove, California. Only looking at 3 bedroom, 2 bath homes that were built between 2000 and 2007.  The average home in this neighborhood was about 1,692 square feet in size and the average sales price was $197,000. That amounts to an average cost per square foot of $116.

So, on the surface, the older home was about $6 per square foot cheaper, but was also much smaller.

Does that mean that I could tell her that the older home was a better buy?  Again, it depends.

Most of the homes built before 1991 in our communities had cedar shingle roofs.  Most of them are in need of replacement.  So, if you bought an older home with a shingle roof, you would need to consider the cost of a new roof when you compare these older homes with the newer homes that have tile roofs.  Generally, you are not going to replace a shingle roof with a tile roof because the older home was not engineered to handle the weight of a tile roof.  The alternative would be a standard composition shingle roof.  How much does it cost to replace the old shingles with a composition shingle roof?

I went online to the Service Magic site that provides the homeowner with estimators for such tasks. http://www.improvenet.com/HomeOwner/ProjectTools/index.html  Based on the the roofing estimator, depending upon the type of roof you were replacing and the quality of the roofing materials you were using, the cost could be somewhere between $5,000 and $10,000 to replace the roof.

Unfortunately, the older roof is not the only consideration.  What about paint and carpeting?  You may have that expense for the newer home, as well as the older home, but since the newer home is generally larger, the cost for paint and carpet will be higher in the newer home.

Also, the kitchen and bathroom may need updating in the older home.  And, last, but not least, you may need to consider replacing windows in the older home. That can add another $15,000 or more to the cost of upgrading the older home.

It seems like it is pretty easy to bring the cost of the older home up to the cost of the newer home if you do the roof, windows, kitchen and bathroom.  You still have an old heating and air conditioning system to deal with too.

Although the older home was an average of $42,000 cheaper than the cost of the newer home, was it the better investment or not?

If it’s a home that I am buying as a rental, then maybe I will lean towards the older home because I probably won’t do anything other than the roof and paint and carpet.  If I am going to live in it, then I will want to do it all and my overall cost will probably be about the same.

In the end, I guess it is all a matter of personal choice. Some people really like the look and feel of the older, more mature neighborhood. Some want the newer neighborhood.

With the above info, you should be in a position to make the best choice for you. And, when you are ready to move forward, give us a call at www.ElkGroveRealEstate.com, and we will be happy to answer your questions and help you experience the joy of home ownership.


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

 

PMI Tax Deductibility Expires December 31, 1012

If the increase in the upfront PMI and the increase in the monthly PMI for FHA buyers, wasn’t bad enough, it looks like these homeowners will also lose the tax deduction for these costs at the end of the year.

What does  the expiration of the Tax Relief and Health Care Act of 2006 mean to the home buyer or the home seller?

That means that the cost of home ownership will increase with for many because approximately  70% of all 1st time buyer use FHA loans. And when the cost of home ownership rises, there will be fewer buyers, and those remaining, will have to purchase lower priced properties because their purchasing power will decrease. That means that the sellers will get less for their houses.

It’s just this simple.  Here’s how the upcoming changes will affect your clients

For example, if a buyer is buying a home for about $311,000 the loan amount will be about $300,000 with the minimum 3.5% down.  The estimated monthly payment will be about $2146. (That would be a 30 year loan at 4%)

The mortgage insurance premium is approx. $320.

In California; a married couple with an adjusted gross income of $100,000 are typically in a 45% federal and state marginal tax bracket.

The loss of the PMI deductibility translates into a payment increase of $135 a month…or in other words a defacto 8.5% (after tax dollars) net increase in house payment.

This is not what our recovering housing market needs!!!!!!!!

If I were a home buyer, or even a home seller, I would be talking with my legislators and asking them to extend the tax deductibility of the Tax Relief and Health Care Act of 2006.

The following committees will have input to extending the life of the 2006 legislation.  The number in parenthesis indicates the number of California legislators on those committees.

House Committee on Ways and Means (5)

House Committee on Financial Services (7)

House Committee on the Budget (4)

At this time neither of our two Senators sit on committees that can influence this legislation on the committee level…but given their seniority in the Senate..it would be helpful to contact their offices as well.

Senator Barbara Boxer

Senator Diana Feinstein

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

 

Selling Your Home In Today’s Market

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This article was written and provided by Kris Vogt, President, Coldwell Banker Sacramento-Lake Tahoe Region

As the Sacramento area’s housing market continues to bounce back from the recession, more and more buyers have decided they can’t wait any longer – now is the time to get back into the market to find their next home.

While the real estate market still has its challenges, things are very different today than they were in 2009, 2010 and even early last year. Buyers are generally more optimistic about the future, ready to purchase, much better qualified for a loan and, in many cases, are paying big down payments or even all cash for their next home.

Indeed, the scales of supply and demand are once again moving back in the direction of home sellers after being out of balance for several years. While countless buyers are out there pounding the pavement for a home, the problem now is that there just aren’t enough sellers to meet the demand in many communities.

As the economy continues to improve and with a shortage of attractive properties in good neighborhoods, buyers are once again paying good prices for properties rather than simply looking for distressed homes at bargain basement prices. And in some cases, properties are even getting multiple offers, driving up the sale price above the asking price, as a recent San Jose Mercury Newsstory discussed.

So if you’ve been thinking about selling your home, now may be an ideal time to do so while buyers are eager, interest rates are still low and there isn’t as much competition from other sellers as there usually is this time of year. Here are several suggestions on how to get started and the best way to get top dollar for your home in today’s market.

  • Pick the best agent for the job. Selling a home is never easy, but in today’s complex real estate market it’s particularly challenging. So it’s more important than ever to find an experienced professional Realtor to help you get the job done. This is no time for amateurs. Start by interviewing several agents to see who has a proven track record of successfully marketing properties in your area. Ask them about their marketing plan, including print media, social media and online marketing via major real estate websites. Find out how well networked they and their brokerage are to other agents with potential buyers. Do they have offices beyond your city limits and even outside the state? Today’s buyers are just as likely to be relocating from across the country as they are from across town.
  • Go online and be visual. Remember the days of sticking a sign in the front lawn and taking out an ad in the local paper? Those days are long gone. Nearly 90 percent of buyers start their search for a home online, according to the National Association of Realtors. So you must be there in a big way to compete for the attention of buyers. Work with your agent to put up lots of high-resolution photos and as much information as possible. Make sure to show photos of all the major areas of your home and yard to give buyers as much of a sense of being there as possible. If not, buyers may wonder what you’re hiding. And strongly consider using video and virtual tours. Such marketing tools are no longer just for luxury homes.
  • Price your home competitively for today’s market. Just because a house comparable to yours sold for a certain price before the recession doesn’t mean you will be able to get the same price today. A lot has changed since then. And while prices are firming up, it’s still important to realize the new realities of today’s market. Talk with your Realtor to determine the appropriate, competitive listing price for your home based on current market conditions. You may even choose to have an appraisal done in advance of setting the price. Remember that in this market, homes that are priced aggressively attract the most buyers and – in some cases – multiple offers that push your final sale price even higher.
  • De-clutter and de-personalize. De-personalizing and de-cluttering a home before putting it on the market can help make it easier for buyers to imagine themselves living there – a crucial step in the selling process. Take down family portraits, personal collections and knickknacks. Homebuyers are looking for a home they can picture their family living in, not yours. Removing these items will also eliminate clutter and ensure that people are looking at the house itself, not at the photos from your last family vacation.
  • Update, freshen up. Keeping in mind that some buyers take move-in condition to be important, put your home in its best light. Possibilities include replacing outdated kitchen and bathroom fixtures, applying a fresh coat of paint and/or refinishing the kitchen cabinets. Replace worn carpet or fix broken tiles. Many cosmetic touches are surprisingly affordable but may yield much higher sale prices. The less work buyers have to do when they move in, the faster they may be willing to make an offer.
  • Conduct a full home inspection. If a professional home inspector determines that there are negative issues with the home, consider repairing the problems before buyers show up at your door. Potential buyers will cast an extremely critical eye over your home if it needs too many repairs – especially if they are trying to decide between your home and another one without problems. Be sure to have the home inspection report available for prospective buyers along with an itemizing all of the repairs that have been made and the associated cost for each to demonstrate the investment you’ve made in your home.
  • Make your home and yard picture perfect. As the old saying goes, you only get one chance to make a good first impression. When a buyer sees your house for the first time, a positive impression can make or break the sale. You can maximize curb appeal by trimming trees, planting flowers and even rolling out a new lawn if needed. A fresh exterior coat of paint might also prove valuable. And consider having a professional “stage” your home to make it even more attractive for buyers by rearranging what you have and/or bringing in other furnishings and accessories.
  • Be patient and flexible. You’ve done all the right things to put your home in the best position to sell. But there will undoubtedly be bumps along the way. A buyer may have difficultly securing financing. The appraisal may come in lower than expected. The escrow period could drag on longer than you thought before the deal closes. It’s not unusual to have occasional issues pop up. After all, buying a home is the single biggest financial transaction most of us will ever make in our lives. Through it all, remember that your Realtor is there by your side. He or she will be there with you every step along the way, managing the tough issues so you don’t have to and helping you achieve all of your home selling goals in today’s market.
ColdwellBanker3d3cweb

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.com.