Tag Archives: Property Value

September Market Update From Kris Vogt, Coldwell Banker

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REAL ESTATE MARKET UPDATE A monthly

Hello,

Our first edition of Real Estate Market Update was a huge success! I’m so glad to hear that so many of you were appreciative of the numbers and happy to share it with your clients.

Market Commentary: For starters, I’d like to congratulate all of our offices on their hard work over the last several months. Earlier this week I was reviewing our annual goals and already two thirds of our offices have exceeded their 2011 goals—in some cases by as much as 200%. We can attribute much of that success to the tremendous growth of our company as well as the hard work and commitment that our Agents set forth each day as we tackle this ever changing market.

  • The word for the month is inventory—lack of that is. In fact, over the last month we have seen inventory numbers drop significantly. In the $0-$250,000 market (Tri-County combined), inventory levels dropped by 7% month over month and by 18% year over year. In the $250,000-$500,000 (Tri-County combined), inventory levels dropped by 3% month over month and by 24% year-over-year. In the $500,000+ (Tri-County combined) niche, inventory levels dropped by 6% month over month and by a whopping 26% year-over-year. What does this meant for our market? Well the bottom line is, scarcity creates value. As inventory levels drops and thus options for buyers drops, the market becomes more competitively paced and prices will eventually begin to rise.
  • Another major bright spot for us is absorption rate.Absorption rate is the total new listings coming on the market divided by the number of contracts written. Essentially, when we see increases in absorption rate, it means we are writing contracts faster than listings are coming on. As you’ll notice, the brightest spots of the market right now continue to be the entry-level and the upper-end. The move-up market, though showing great strides, continues to be the hardest hit of the three levels. What we can extrapolate from this is that the entry level continues to be driven by investors and first time home buyers while many cash buyers and Bay Area buyers are driving the upper end. Our move-up market, however, continues to feel the challenges as buyers seem resistent to selling their home even though they may see the benefits of the move-up market. Here’s what we are seeing on a statistical level:
    • Tri-County market combined: With a 78.2% absorption rate, we saw a 13% increase month over month and a 38% increase year over year.
    • Entry level*: Standing at 85%, we saw a 16% increase month over month and a staggering 46% increase year over year.
    • Move-Up**: With a rate of 69.7% rate, we saw a 4% increase month over month and a 20% increase year over year.
    • Upper-end***: With a 53.2% rate, we saw a 17% increase month over month and a 30% increase year over

Click on the following graphs to further analyze the latest market conditions:

image001 image001a
Click here for Tri-County market conditions (all price points). Click here for Tri-County $0-$250,000.
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Click here for Tri-County market conditions ($250,000-$500,000). Click here for Tri-County $500,000+.
  • Months Supply of Inventory. I mentioned this last month as well but we continue to see a decline in months supply of inventory. Monthly Supply of Inventory is a good indicator that supply and demand are becoming more in balance. Right now the entry level market is at 3.8 which is really good, especially as compared to the last few years. This month the trend continued:
    • Tri-County all price points combined: 4.1 (August 2011)/5.9 (August 2010) – 31% decrease
    • Entry level: 3.8 (August 2011)/5.6 (August 2010) – 32% decrease
    • Move-up: 4.1 (August 2011)/5.25 (August 2010) – 22% decrease
    • 9.0 (August 2011)/10.9 (August 2010) – 17% decrease
  • Prices continue to remain relatively flat or stable. Here’s a lot at median price changes year over year of sold listings:
    • Tri-County all price points combined: $185,000 (August 2011)/$203,000 (August 2010) – 9% decrease
    • Entry level: $150,000 (August 2011)/$156,000 (August 2010) – 4% decrease
    • Move-up: $323,000 (August 2011)/$325,000 (August 2010) – 1% decrease
    • Upper-end: $600,000 (August 2011)/$615,000 (August 2010) – 2% decrease

Of course, the question on everyone’s mind is, “When will this market ever begin to change?” Well I’m not one to guess the future but what I can say is that there are multiple factors that suggest a stabilization of the market. Agents are really busy, we have a ton of buyers (many of whom are cash) who are scooping up the inventory and we continue to see historically low interest rates (and it seems as if they just keep getting lower). Screenshot20110923at104554AM

Many buyers are also weighing the pros and cons of renting versus buying right now. Interestingly, an article was just released by Time Moneyland noting the Top 10 Cities to Buy vs. Rent. Sacramento was listed as No. 6 in the nation. The report noted, “It’s actually cheaper to buy than rent in 74% of major U.S. cities, according to data from real estate search engine site Trulia.”

So while I won’t predict the future, I’ll leave you with this, the sweet spot has gotten even sweeter. Supply and demand are much more in balance than we have seen them in years, the indicators of a market stabilization continue to be prevalent and August was a notable month with inventory levels dropping dramatically. Make what you will of that and let’s watch next month’s numbers to see if we see a continued trend.

That’s it for now. Make it a great month.

Sincerely,
Kris

* Entry level: $0-$250,000 | **Move-Up: $250,000-$500,000 | ***Upper-end: $500,000+

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.

Is Your Home Worth Less Than It Was Last Year?

Do you believe that your house has dropped in value?  If so, it is time to request a reduction in your property taxes.  The Sacramento County Tax Assessor accepts  requests until November 30th each year.

Proposition 8, which passed in 1978, amended Proposition 13 to recognize declines in value for property tax purposes. As a result, the Assessor is required to annually update the assessed value either a property’s Proposition 13 base year value factored for inflation, or its market value as of January 1st, whichever is less.  The Proposition 8 decline in market value assessments are temporary reductions that recognize the fact that the market value has fallen below its current Prop 13 factored value. Here is more info on Prop 8.

After the property value has been decreased and the assessment adjusted by the tax assessor, that property’s value must be reviewed each year as of the January 1st lien date, to determine whether its market value is less than its Prop 13 factored value. Prop 8 values can change from year to year as the market fluctuates. When the market value of the Prop 8 property increases above its Prop 13 factored value, the Assessor will once again update the assessment to the property’s Prop 13 factored value. In no case may a value higher than a property’s Prop 13 factored value be enrolled.

So, what to you need to do?  You need to contact us at www.ElkGroveRealEstate.com and request comps for your home so that you can complete the Assessor’s form.

Remember these important tips:

1.  You will need comparable sales(comps) from the time period of January 1st to March 31st.

2.  You should start the appeal process (information is on the application) if you have not heard back from the Assessor within a week to 10 days after sending in your application.  Don’t wait until the end of the month to send it in.  Do it now.

The process can be fairly simple and there are companies out there who can do it for you buy why would you want to spend a hundred dollars or so to have someone fill out a simple form for you.  You are trying to save money here.

Just email us at Jack.Edwards@cbnorcal.com with your address and contact info and we’ll pull the comps for you for you to complete the process on your own.

 

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.

What is SB 458 And How Does It Affect Me?

Earlier this year, the state legislature passed a bill, SB 458, that states that a lender cannot “require” the seller/debtor to make any contribution towards a second mortgage in order to do a short sale.  The reason behind this legislation was to protect the consumer from the lender.  Unfortunately, one of the possible ramifications of this legislation is that many of the second mortgage holders may not settle for what the first mortgage holder is providing from the proceeds of the sale and the second mortgage holder may stop the short sale from happening.

What is the short sell homeowner to do if they are faced with this problem?  Nothing says that the seller cannot “volunteer” a contribution to satisfy the second mortgate holder so that they can get the deal done.  For example, if the first mortgage holder says that the second mortgage holder will only receive $5,000, and the second mortgage holder responding to a short sale offer with a requirement that they receive $X more.  They don’t say where this money is to come from because they cannot require the seller to pay it.

In fact, this money may come from anyone, including the seller.

Just keep in mind that what ever is done, it must be fully disclosed to all parties and must be reflected on the HUD statement.

For more great information on legal issues, check out Steve Beede’s blog at sjbeede@bpelaw.com 

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.

Realty Check — Hey, Case-Shiller, It's Not The End Of The Real Estate World!

SkyNotFalling
So many of us giggled nervously as we thankfully avoided the end of the world a couple of weeks ago. But judging by the continued “end of the world” type coverage the Case-Schiller housing study got this week, maybe we are nearing the end.

Yes. I am joking, but I am amazed at the attention this report gets. It covers 20 markets, yes only 20, and that is just one of its many flaws. Yet many consider it “the be-all-and-end-all” economic indicator that defines our entire national housing picture. As we know, all real estate is local, and it is unfortunate that the reporting on a 20-city “national” index can have such a jarring impact on otherwise rational people.

Look at some of the headlines the other day:

“Home prices at lowest point since 2006 bust”

“Home values continue downward churn”

“No relief in sight’ for falling home prices”

And even in paradise – Maui- the front page headline in the paper screamed “Crash Spreads.” And Maui isn’t one of the 20 markets. In fact the nearest market covered is San Diego, a mere 2500 miles away!

Shawn Daly, an agent with Coldwell Banker Residential Brokerage in Evanston, Illinois, had to calm down two skittish buyers this week.

One, who is currently working in Iraq, had initially placed on offer of $450,000 on a lakefront Chicago condo. The sellers countered with a price of $525,000. But after seeing Case-Schiller inspired headlines on the web, Shawn’s client emailed him to ask that he lower his offering price by $50,000. Shawn explained that the sellers did not agree with his first offer so if he went lower he wouldn’t get the home. The buyer calmed down and agreed.

Shawn correctly pointed that the Case-Schiller Home Price Indices are meaningless to individual buyers who are looking at specific houses, on specific streets, in specific neighborhoods.

Then yesterday, Shawn met another client for a tour of potential homes. They hardly said hello without telling Shawn they were more nervous than ever after seeing the report on the news.

You have a right to be nervous, but I can’t say this enough. Now is the smartest time in my 36 years in real estate to buy a home if you have the lifestyle reason, financial stability and viability to do so.

And it’s all about “Triple I…P”. Inventory, Interest rates, Incentives and Pricing. Start with inventory, because most communities have seen a rise in the amount of homes on the market, you have more choices. Interest rates for mortgages remain at near-historic lows and have actually trended down over the last 7 weeks, with Freddie Mac reporting 30-year fixed rates now averaging 4.55%. Incentives are the tax advantages to home ownership. And of course, there are prices. Prices are down from mid-decade highs, but in many, many markets are showing stability, slight declines or even increases. Home affordability remains near record levels and the price-to-value proposition in most markets is extremely compelling.

If you are interested in buying a home, you owe it to yourself to contact a real estate agent in the community you are interested in. Look at homes, do a rent vs. buy analysis, explore what is available in your price range.

Don’t just take my word for it. Do your homework.

You might just be surprised that the end of the world isn’t here yet … at least until next month’s report.

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.

Are You Tired of Getting Outbid?

Here’s an article, from the Wall Street Journal, that gives buyers some suggestions to help you in submitting a successful offer.  Take a look.

http://www.tiny9.com/u/Wall_Street_Journal_article

I especially agree with #3, about getting your agent to give you a comparative market analysis (CMA). I ran a quick CMA for the city of Elk Grove. The search criteria included: 3 beds, 2 bath, sold between April 1 and May 10, 2010.  There were 79 homes sold during this time.  Some of the statistics are amazing.  Days on the market ranged from 1 to 335. The percentage of sales price to list price ranged from 77.75% to 111.76%, with an average of 100.32%.  The average square foot price was $129.23. 

To ensure that you aren’t paying too much, a CMA of similar homes in the area is a good baseline.  From there you can consider location, condition, and other important criteria. 

I know I’m biased, being a Realtor and all, but it’s in your best interest as a buyer to have good representation.  Work with a Realtor and listen to their advise.

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.