Real Estate Market Update

I have been feeling the softness in the Sacramento real estate market for the past few weeks. My first indication things were slowing down is when I had to put one of my short sale listings back on the market after the buyer backed out just as the lender approved the transaction. This house on Roseville Street in Roseville is very cute, priced right and after we had it in contract had to turn away Realtors and potential buyers. I thought this would be a snap to get another offer, especially since the short sale negotiations are virtually done. We have now had it back on the market for a few weeks and not a single offer has come through. This is a house that earlier this spring had multiple offers and tons of interest in.

If you are interested in learning more about what is happening in the real estate market and where we are here in the Sacramento area, take a look at my column, “Some Steam has Left the Market” over at Rocklin & Roseville Today and Sacramento Today.

Wife Swap

I have watched this show in the past and always think, where do they get these people, I would never do that! Well that was before yesterday when I got an email from the show’s producer asking me to consider being on the show. Evidently they are looking for a “wife” who is also a Realtor and they found my website, www.jalone.com. I thought for sure Michael and Mikie would have fit and not want me to do it. I was wrong; Mikie really wants to do it. I think he likes the idea of him being on TV. Michael was a bit less enthusiastic but encouraged me to at least talk to the producer. He thinks I would make a great participant but could see me having a meltdown if they sent me to house that was dirty or had reptile pets. He thought it would be good exposure for my business, “…if you behave yourself!” On the other hand he is not sure about having a “new wife” in the house.

Everyone I mention it to laughs first then encourages me to do the interview. Maybe they know something I don’t? What do you think? Send me an email at juliej@jalone.com and let me know.

Sacramento Home Sales are up

If you read the headline in the Sacramento Bee this morning, “Home Sales up for 2nd month” it might give you a feeling that our real estate market is doing pretty well after almost three years of slumping. Don’t get me wrong, I am feeling optimistic about eventually getting back to a balanced real estate market but when you get behind some of the numbers it is pretty clear we have a ways to go.

Compared to a year ago, there were over 47 percent more sales of existing homes in Sacramento County during May than a year ago and up 154 sales from April to 1,827 closed escrows. This is a significant increase but for Placer County the news was not as positive. Sales or existing homes in Placer was down 24 percent from last May to 473 sales and this number was down 6.5 percent in the past month. Nevada County sales were also down while Amador, El Dorado, Sutter, Yolo and Yuba counties all experienced increase.

Prices of existing residences in all eight counties were down year over year. Not surprisingly, Sacramento had the largest decline at almost 36 percent. Placer was down 24.6 percent and Amador experienced the smallest decline, 18 percent. Only Yolo and Yuba counties had a price increase from the previous month.

Total sales for May in the eight county region totaled 3,420 which is up 204 from April but this number does not compare well to May 2004 when over 6,700 homes were sold.

The pressure on price will continue as long as we have excess inventory available. The good news is that even with the continued increase in foreclosures inventory has actually been declining over the past few months during a time when you would expect to have more houses coming on the market than

Check back tomorrow, I want to give my thoughts on the declining prices we are still seeing.

Monday - Monday

Where did Father’s Day weekend go? At our house it seemed so go by very quickly and here we are starting another busy week. I may be starting to feel the pressure of getting ready to go on vacation but it seems the Sacramento real estate market is showing no signs of slowing down.

We have continued to see a activity in the Sacramento short sale market as we picked up two new listings last week and as important, successfully finalized two short sale lender negotiations. Once we get the lender to accept the short sale proposal the purchase of the homes can start the normal closing process. I always enjoy having transactions complete but there is some extra satisfaction when they are short sales.

Check out our new listings from last week. Robin Sweigart has two new listings in Granite Bay’s prestigious Cavitt Ranch Estates. One is a spectacular luxury home with panoramic views on over four acres and the other may be the best view lot, if you can call 7.7 acres of land a lot, in Granite Bay. You can see the home here and the lot here. Tina Farinas added two new short sale listings. The first is a nice home in a great Elk Grove neighborhood and the second stretches our geographic boundaries and is our first ever listing in San Joaquin County. It is another short sale in the picturesque town of Lathrop.

If the week goes as fast as the weekend it will be Friday soon!

Short Sale Headaches

Many lenders have dedicated staff to deal with short sales and some appear to have developed a process that works for them. Where the problem occurs is the volume of requests for short sales. It overwhelms the negotiators and others who deal with borrowers and Realtors who are requesting short sale consideration. Yesterday, we were talking to a negotiator for a lender who when we asked her to call us back with some additional information she didn’t have, said, “I have over 200 people just like you that want me to call them, just send me a new closing statement with the amount I want or this can go to foreclosure.”

Lenders are doing themselves a disservice by not staffing up these departments and allowing the negotiators to think before they act. The cost to some of these companies is huge, rather than recovering a few thousand dollars they will spend up to $60,000 in the foreclosure process and end up with nothing.

The answer here is to change the process and make the Realtor a partner not an adversary. Talk to us before we list the house, determine what a fair price is, work out the payoff needed and let us get it for them. It would make our jobs as Realtor’s easier, buyers would know if the bank is going to accept the short sale request and the lenders would reduce the workload and improve their bottom lines.

Sacramento Housing Inventory is Down

The trend is clear; we are not going to be seeing the normal buildup of inventory of homes in the Sacramento real estate market this year. Normally starting in late February or early March the number of homes coming on the market is faster than sales so inventory of available homes increases until August. Going into the spring, inventory was already high but instead of increasing it has actually declined. As of June 9, according to HousingTracker, there were 14,670 homes on the market in the Sacramento area. This level of inventory is down 4.2 percent in the past three months and down 11.5 percent from six months ago. Again this is particularly noteworthy that the decline is happening during a time of year when we would expect to see inventory growing.

The decline in inventory is a direct result of more homes being sold than houses being put on the market. Yes, sales are up but I also believe there are homeowners who, although they would like to sell are holding off until they see if the market will improve.

In the latest report from HousingTracker, the median asking price of homes on the market was $305,000. This is down $2,000 from the week before but holding level from a month ago. Compared to six months ago the median asking price is down almost 10 percent and off 23.4 percent from a year ago. If inventory continues to decline there will be some pressure on prices to increase but I am not making any predictions in this area as I think it will be mid-2009 before we may see any firming of prices and some balance in the market.

Bank Workouts at Record Levels

Approximately 183,000 at-risk homeowners were provided loan workouts in April, 23,000 more than in March, according to a new report from HOPE NOW, a private sector alliance of mortgage servicers, counselors, and investors working to prevent home foreclosures across the country. The April numbers represent the highest number of workouts provided through HOPE NOW since the program was launched in July 2007, according to the alliance.

"These numbers clearly demonstrate that we are succeeding at helping homeowners avoid foreclosure and stay in their homes," said HOPE NOW Executive Director Faith Schwartz. "Foreclosure benefits no one: the borrower, community, lender, and investor all lose. HOPE NOW has every incentive to help troubled homeowners hold on to their homes, and the alliance will continue to do everything possible to reach and help as many as possible."

From California Association of Realtors Newsline:

I have been writing about using short sales to avoid foreclosures here in the Sacramento area but if you or someone you know is having difficulty paying their mortgage and wants to stay in their home, HOPE NOW is a great resource to help dealing with your lender. As you can imagine banks and other mortgage lenders have been swamped by what is happening so like I recommended for considering a short sale, find someone with experience and knowledge to help you. For more information about HOPE NOW, visit their website.

More on Short Sales

It is clear the Sacramento real estate market is going to continue to see short sales and foreclosures for the foreseeable future. For many months the mainstream media focused on foreclosures and bank owned property and didn’t pay much attention to short sales. Today we are hearing more about them because there are so many.

Short sales are a strategy for some homeowners to avoid a foreclosure and can represent a good deal for buyers if they are patient. If you or someone you know is having difficulty making their monthly mortgage payment read my latest article, “Short Sale Success” find out more about short sales and how our process and experience has made them work for our clients.

How to find a good lender

With the mortgage industry going through change and consolidation it is vital for home buyers to have a “good” lender working for them. In my latest Rocklin & Roseville Today and Sacramento Today columns, “Home Buyer Key to Success: A Good Lender” I write about good lenders and one who is on my “never work with again” list. I also provide some tips on how to make sure you get a good lender when you are in the market for a loan for a new purchase or even a refinance.

I have worked with some wonderful lenders over the years but right now, when a client asks for a lender recommendation I feel as positive as I have ever felt to provide them with several names. Having our clients working with a good lender not only makes my job easier but adds to the overall positive experience for the client. If you are in the market for a lender, make sure you read my column today.