Memorial Day Impact?

During the week ending May 28th HousingTracker reported homes for sale only increased 190 in their definition of Sacramento. For those you who have been reading my Blog, you know this is a site I check to monitor the rapid growth of inventory we have on the market.

The question today is if we are finally starting to see a slow down in inventory growth or was it the looming holiday weekend that slowed down homes coming on the market? In the past few weeks we have seen increases of 421 and 475 so an increase of 190 is a significant reduction in the growth rate. Since the beginning of the month HousingTracker has shown an increase in inventory 1,249 to a total of 10,163 homes available for sale. This is inventory growth of 14 percent and the month is not over yet.

I will report that the Memorial Day weekend is not a busy real estate time. I held open houses on Saturday and Sunday and got a fair amount of reading done. The month is almost over and we should be seeing some May activity reports soon. I am going to predict the level of sales will have increased from April and median sales price will be up slightly in most communities. Compared to last year we will obviously see lower activity and mixed results for median sales price.

Have a great Memorial Day and remember our troops and those who have given the ultimate sacrifice for our great country.

National Market is Better?

Yesterday the National Association of Realtors announced that although sales eased in April after a two –month rebound and was expected. The NAR Chief Economist, David Lereah said, “Higher interest rates are slowing home sales, but we see this as another sign of a soft landing for the housing sector which remains at historically high levels,” and he is expecting, “… modest decline for the second quarter, with sales leveling out before rising in the fourth quarter.” NAR President Thomas M. Stevens says the big run-up in home prices is over. “After five years of booming sales, we are now experiencing normal market conditions across most of the country.” He also said “Inventories levels have come up to balanced levels between home buyers and sellers, so the pressure has come off of home prices and most owners can expect steadier gains in home values for the foreseeable future.” The full story can be read at Realtor Magazine.

I would be hard pressed to say that it is only higher interest rates slowing down our Sacramento market or that inventory levels are balancing prices, let alone we can expect steadier gains in the future.

By the way take a look at my Rocklin & Roseville Today column, “Ready to Show is an Everyday Job”, today, my husband Michael joined me in previewing some homes the other day and wanted to write about what he saw.

Memorial Day Weekend

I know everyone is busy this week and looking forward to the long Memorial Day weekend which has traditionally been the start of the summer season. I think it is also important to remember that Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in our nation’s service.

If you are in town this weekend, please stop by one of my two open houses and introduce yourself. On Saturday I will be holding my listing on Fairway Drive in Rocklin open from Noon to 3 PM. On Sunday I will be at my newest listing on Greywood Circle in Roseville, also from Noon to 3 PM. I would love to meet you and show you these homes. Have a great holiday weekend and be safe!

Rocklin & Roseville Today

Take a look at my column at Rocklin & Roseville Today, “More April Numbers and Still Working Hard”. I just posted some additional results about the Greater Sacramento real estate market for April and talk about some the recent experiences I have been having in my own business.

More Inventory and a Bizarre Story

The median asking price is holding steady even though the inventory of homes available for sale continues to grow. As of today, HousingTracker reports 9,973 homes on the market in their view of Sacramento. The median asking price remains, as it has since May 1, at $395,000. This is a growth 17.5 percent increase in inventory over the past month and 421 homes in the past week (4.4 percent).

Today, most buyers have more homes to choose from than them to look at them and growing negotiating power. With that in mind I find it bizarre that this week; I had buyers who submitted an offer to what appeared to be anxious sellers only to be told they could not respond in a timely manner. Albeit our offer was only 95.6 percent of asking price it was from non-contingent highly qualified buyers looking to close within 30 days. We got the standard stall of agent out of town, wife busy, and husband not available. All this happened after three calls from the agent prior to the offer asking if we were going to submit one. They had lowered the asking price during the week and clearly wanted to see if they could attract another offer over the weekend. They could easily have had this time by countering back. My clients are willing to negotiate. They would have increased their offer. We are off to look at a few more today and know we will be in contract by the middle of the week

Could April be the rest of the year?

I have been looking at the April real estate activity reports for Rocklin and Roseville and have not found any clues that the market is doing any big turnarounds from the winter doldrums. It is important to note the first two weeks in April were still wet and cool, we had schools out for Spring break, taxes due and April is not a high point for real estate activity.

In a recent story in the Sacramento Bee, the real estate market during April was summed up by stating, “In the most explicit sign yet of the continuing down cycle gripping home sales in the Sacramento area, median prices fell again in April in El Dorado, Placer and Sacramento counties, while home sales remained flat or fell behind those in March…” I just published my April analysis and comments and they can be found on my web site at, The Rain Continues: Sacramento in April.

What Will April Rains Bring?

I have been looking at the April real estate activity reports for Rocklin and Roseville and have not found any clues that the market is doing any big turnarounds from the winter doldrums. I will remind you that the first two weeks in April were still wet and cool, we had schools out for Spring break and taxes due. Having said that, lets look at the numbers.

April sales numbers for Rocklin were virtually flat from March activity. Total Rocklin sales were reported at 59, only one more than March. Rocklin zip codes, 95677 and 95765 were more than 50% off the pace from April 2005. In regards to median price, Rocklin results were mixed. In zip code 95677 the median price paid in April was $489,950, a 27.9 percent increase from a year ago. This number is also up from March but down slightly from February. For zip code 95765 the annual appreciation in April was only up 1.58 percent to $482,500 and down 4.5 percent from March with a decline of $22,500 in median price.

Roseville results were even more dismal. There were only 119 homes sold in April significantly below the April 2005 activity and down 13 from the March level of sales. For March all three Roseville zip codes reported median price increases from a year earlier. In April only zip code 95661 showed an annual increase in median price, 15.1 percent. Zip codes 95678 and 95747 were off 2.9 and 1.5 percent respectively. Compared to last month 95661 median price increased to $495,000 a 5.49 percent increase month over month. Like the annual numbers, zip codes 95678 and 95747 both showed declines from March. The median price in April for 95678 was $380,000, down $27,750 from March (-6.8 percent). The same numbers for 95747 were $448,000 down a whopping $39,000 of 8 percent from March.

For a good overview of the April real estate activity see the story in today’s Sacramento Bee, Forget about housing rebound - Sales, inventory and prices all point to a significant downturn in region's market by Jim Wasserman.

I think it is worth waiting to see what happens in May but I am becoming increasingly convinced that if we are moving back to a “normal” market the pendulum may be swinging abnormally negative this year to get us there over the next two years.

Rates and Applications are Down but Troops are Not

Freddie Mac reported in their Weekly Primary Mortgage Survey for week ending May 11th that the rates on 30-year mortgages were down slightly, the first decline after six straight increases. The rates on 30-year fixed-rate mortgages averaged 6.58 percent, down from 6.59 percent the previous week, which had been the highest level in nearly four years.

Although a week behind Freddie Mac the Mortgage Bankers Association released their report on applications for the week ending May 5. Their index, which measures loan application volume, was down 5.8 percent from the previous week. The refinance share of mortgage activity decreased to 33.8 percent of total applications from 35.2 percent the previous week, which is the lowest share since June 25, 2004.

As some of you know, my husband’s son, Mark Jalone is serving with the US Army in Iraq. This is his third tour over there and still has about six months to go before returning home. Regardless of how we feel about having US troops in Iraq today, we whole heartedly support our men and women who are part of “Iraqi Freedom.” Armed Forces day is May 20th and the Army & Air Force Exchange Service is making it easy for anyone to honor America's troops with "Gifts from the Homefront" gift certificates. If you want to send one, log on to aafes.org or call (877) 770-4438. The Gift from the Homefront may be distributed to "any service member” or sent to a specific service member.

Rates and Applications are Down but Troops are Not

Freddie Mac reported in their Weekly Primary Mortgage Survey for week ending May 11th that the rates on 30-year mortgages were down slightly, the first decline after six straight increases. The rates on 30-year fixed-rate mortgages averaged 6.58 percent, down from 6.59 percent the previous week, which had been the highest level in nearly four years.

Although a week behind Freddie Mac the Mortgage Bankers Association released their report on applications for the week ending May 5. Their index, which measures loan application volume, was down 5.8 percent from the previous week. The refinance share of mortgage activity decreased to 33.8 percent of total applications from 35.2 percent the previous week, which is the lowest share since June 25, 2004.

As some of you know, my husband’s son, Mark Jalone is serving with the US Army in Iraq. This is his third tour over there and still has about six months to go before returning home. Regardless of how we feel about having US troops in Iraq today, we whole heartedly support our men and women who are part of “Iraqi Freedom.” Armed Forces day is May 20th and the Army & Air Force Exchange Service is making it easy for anyone to honor America's troops with "Gifts from the Homefront" gift certificates. If you want to send one, log on to aafes.org or call (877) 770-4438. The Gift from the Homefront may be distributed to "any service member” or sent to a specific service member.

Mixed Media Continues

According to a recent story published by the National Association of REALTORS®, “the housing market is settling but should experience its third-best year in 2006, with job creation and a growing economy offsetting some of the effects of rising interest rates.” The article goes on with the normal blah, blah, blah from their economists about the last few years and this year being a return to normal.

In the world of the bubblers there is a sharp contract to the NAR story. A recent article in the Sacramento Bee, Sign of the Times about an area close to Mather Field where there is a street with seven homes for sale and picked up by several blogs included this comment, “What's happening around Mather is a microcosm of every reason that people sell and move on, especially if they can move up. But mostly what stands out is a desire to tap all that house-generated cash from four boom years - before, some fear, more of it goes away." One of the blog authors went on to point out there were also three pre-foreclosures on the same street. In that same blog there was this posted comment, “We really want you to get a reporter to publish the stats in the papers in the respective counties to push the price decline faster and harder.” The poster goes on to say, “The problem with this industry and the media is everyone wants to bury their heads in the sand. We are mortgage industry insiders....and we agree with you...this crash will be fast, violent and we think it will cause a nationwide collapse.”

Third best year in real estate or a nationwide collapse?

Living in a Dead Zone

Yes, the people at Fortune Magazine just proclaimed Sacramento along with seven other communities as Dead Zones. I am sure there are readers out there who will take great delight in this article. Here is what they describe:

With houses hovering beyond the reach of most potential purchasers, formerly
frantic markets grow eerily calm. People who rush to list their homes, hoping to
grab a fat gain just before prices break, take them off the
market.

Sales shrink as buyers float low-ball offers, and sellers
refuse them. Realtors and mortgage brokers find other jobs. The bubble areas
turn into Dead Zones.

I don’t feel like we are in a dead zone but maybe we better all start thinking about moving to Fortune’s “Safe Havens” so we can be in real estate nirvana. I have nothing bad to say about Cleveland, Columbus, Omaha or even Pittsburg but I like it here! If you want to read more, the story is here. By the way they say our homes are overvalued by 57%.

Inventory, Price and Applications

Let’s take a look at Sacramento inventory, asking price and mortgage applications today. A quick check at Housing Tracker revealed inventory is still growing and prices are inching up. As of May 1 there were 8,914 homes on the market in our area with a median asking price of $395,000. During the month that is a 10 percent increase in homes from the 8,103 homes available on April 1. The median asking price has increased 1.4 percent in the last month, 2.3 percent in the last two months but is still 1% below where it was on September 1, 2005 (six months ago) at $399,000. Of interest is what has happened in the past few weeks. The increase in homes on the market is accelerating. In each of the four weeks in April the increase has been larger than the previous week. The week of April 21 to April 28 had an increase of 221 and then on May 1, three days later the number grew over 200. This is the selling season and there is clearly increased activity in the market but it may still be a while before we see the growth in homes available slow and start declining.

Another interesting report available is what The Mortgage Bankers Association calls their Weekly Mortgage Application Survey. It is an index that measures application volume and during the week of April 28 they have reported volume is up 8.8 percent from the previous week. Purchase loan volume was up 11.3 percent while refinance applications increased 5.1 percent. The refinance share of the activity decreased to 35.2 percent which is the lowest it has been since June 25, 2004. There full report can be seen at Mortgage Application Volume Rebounds in Latest Survey.

Sun, Buyers, Rates and the Value of a REALTOR

1) The sun is out, buyers have returned and it was a great weekend for open houses! Anyone out driving around on this past Sunday had to notice scads of open house signs on almost every corner. I wish I would have had my camera when came across one Rocklin corner with eight different signs. I did an open house and had lots of visitors, with many saying they have been waiting for a nice weekend to start looking. Best of all, one of my other listings sold!
2) Rates are up again. The rate on a 30-year mortgage rose for the fifth consecutive week. Freddie Mac reported the fixed-rate mortgages averaged 6.59 percent, up for 6.53 percent last week. This is the highest it has been since the week of June 20, 2002 when rates stood at 6.63 percent.
3) A REALTOR does more for sellers than make the transaction easier, they make them money. In fact, in a recent study conducted by the National Association of REALTORS, it was reported the average seller who uses a real estate professional makes 16 percent more on the sale of their home than do sellers who go it alone. Even if the survey was biased, this is an impressive number and the sellers going it alone must recognize it because their numbers have dropped consistently from a high of 18 percent in 1997 to only 13 percent in 2005.

Warm days, cool evenings, it really is Spring!