Home prices still climbing, but at slower pace

Home prices are still climbing in the Sacramento area, but at a much more moderate pace than a year ago, DataQuick reported Wednesday.

The market research firm said the median sale price of all homes came to $260,000 last month in Sacramento County. That was down slightly from May, but up 13 percent from a year earlier.

Median sale prices in Placer County reached $385,000 last month, the highest in the eight-county region covered by DataQuick. That represented a 6.5 percent increase from a year ago.

DataQuick said the results are in line with the general slowdown in price appreciation elsewhere in California. “Sacramento is more or less mirroring the state in terms of price appreciation throttling back,” said analyst Andrew LePage.

The actual volume of sales was down significantly throughout the region, with activity dropping 10.3 percent in Sacramento County in June compared to a year earlier.

The latest statistics suggest the market is continuing to recover from the 2008 crash but isn’t roaring like it was in 2013, LePage said.

For example, he said the 13 percent growth in Sacramento sale prices is one-third the pace of a year ago, when prices jumped 39 percent.

One reason for the slowdown in price appreciation: Investors are retreating from the market. In June, 25 percent of all purchases were made by investors. A year ago, it was 34 percent. The 14-year average is 22 percent.

“We have fewer investors and cash buyers out in the market,” LePage said.

In addition, job and income growth remains relatively sluggish, putting a damper on pricing, he said.

As for the decline in sales volume, LePage cited a relative scarcity of available homes for sale. That shortage is a reflection of the incomplete recovery in the housing market. Many homeowners either are still “underwater” or have only a small amount of equity in their properties, which means they don’t have the ability to make a down payment on another house. If they can’t move into another house, they can’t sell their current house.

Also, new-home construction remains relatively slow, which puts another constraint on inventory, he said.

Only 121 new homes were sold last month in Sacramento County, down 21 percent from a year earlier.

Courtesy of Dale Kasler, sacbee.com

Sacramento area home prices continue to increase

April statsThe number of homes sold in Sacramento County in March dropped to the lowest level for the month in six years, DataQuick reported Wednesday.

The median price for detached resale homes in the county was $245,000 – 19.5 percent higher than March of last year, the San Diego real estate information service said. Yet only 1,456 single-family resale homes closed escrow last month – a nearly 15 percent drop from the same month a year ago, DataQuick said.

A low supply of homes for sale was the main reason, said DataQuick analyst Andrew LePage. Fewer sales to investors, decreased affordability for buyers and credit hurdles were other reasons, “but tight inventory’s at the top of the list,” he said.

There are currently about 1.5 months of inventory in Sacramento County, meaning it would take about that long to sell all the homes on the market, the Sacramento Association of Realtors recently said. Anything less than three months is deemed a sellers’ market.

Sales volume also fell significantly in El Dorado, Placer and Yolo counties last month compared with March 2013, DataQuick reported

Read more here: http://www.sacbee.com/2014/04/16/6330782/sacramento-county-home-sales-drop.html#storylink=cpy
Enhanced by Zemanta

Tax Reprieve for some California Short Sales in 2014

California short sale sellers have been awaiting news on whether or not the state tax board would follow the federal tax guidelines with respect to debt forgiveness. In fact, when the tax Act was extended, Californians were told that any forthcoming decision at the state level would be retroactive. In an attempt to clarify state tax policy on debt forgiveness, politicians created Senate Bill 30, but it has not yet passed. As such, any Californians who participated in a short sale or deed-in-lieu of foreclosure in 2013 still did not know about their own state tax liability—until recently.

Thanks to a letter from Senator Barbara Boxer to the IRS, Californians now have that clarification. In November, Senator Boxer received the following IRS response clarifying that California families who have lost their homes in a short sale will not be subjected to a tax penalty for debt forgiven after the federal law prohibiting such penalties expires at the end of this year, and the Franchise Tax Board has agreed with those clarifications.

Enacted in July of 2011, California has an anti-deficiency law that protects homeowners from lenders attempting to collect additional assets in the case of a closed short sale transaction. But until Senator Boxer wrote her letter, the IRS had not clarified how this might play out in California. Like many Californians, Senator Boxer noted that with the end of the Mortgage Debt Relief Act of 2007 just around the corner, “…distressed borrowers may face the unfortunate incentive to go to foreclosure rather than seek a short sale in order to avoid a large tax bill.”

The IRS reply included excellent news for California homeowners, clarifying that these families will not face burdensome tax penalties as a result of participating in a short sale—specifically because of the state anti-deficiency statutes. With approximately 55,000 anticipated short sales in 2014 in the state of California, this is good news for those distressed borrowers still on the fence about selling as a short sale.

Californians might not want to do jump for joy just yet. Reilly states, “there are situations where this rule might work against the taxpayer, particularly those who borrowed against property after it appreciated.” He goes on to outline a few of those situations and points out that some of the various exceptions to recognizing debt discharge (including insolvency) will no longer be available remedies.

IRSResponse.nonrecourse 2014

Enhanced by Zemanta

Real estate pros to forecast market’s future

 

One thing experts agree on is that significant job growth is needed for the Sacramento region’s real estate market to continue improving.

Job creation will drive real estate moving forward for the next 24 to 36 months, said Robert Burris, senior vice president of the Sacramento Area Commerce and Trade Organization.

Burris and a group of leading brokers and agents will gather next month in a first-of-its-kind forum to talk about the market’s future.

Organized by the Sacramento Association of Realtors and a host of brokerages, the meeting at McClellan Conference Center on Oct. 17 is unique because it is a nonprofit event and because it will bring commercial and residential real estate brokers, who rarely interact, together in one room.

“If anybody does anything with real estate in Sacramento, this is the place to be. These are the people to listen to,” said event chairman Anthony Scotch, a commercial broker and vice president with Century 21 in Citrus Heights. “I don’t recall anything like this in 40 years.”

Scotch said he and others thought the time was right, with changing market conditions, for the different sectors to interact.

The Sacramento Bee is the official media sponsor of the event, called the Sacramento Real Estate Connect 2014 Regional Economic Review & Outlook.

Among the speakers will be Pat Shea, president of Lyon Real Estate in Sacramento.

Shea was an early predictor of the residential rebound of the past year. After plummeting in the housing crash, home prices shot up by double- digit percentages at a time of ultra-low inventory, heavy investor activity and growing demand from traditional homebuyers.

Shea anticipates the coming year will see a housing market that achieves some degree of stability. “We’re going to see a steady climb of inventory and more stable appreciation in the 5 to 10 percent range,” he said.

He also said he expects sales to remain solid despite interest rates that are rising after hitting historic lows earlier this year.

“Affordability will still be strong, and the desire for home ownership is ingrained in us,” Shea said.

The key to maintaining the market’s momentum is job growth, he said. “If we see more job opportunity, I think we can see a very consistent appreciation in house prices in Sacramento,” Shea said.

Chains making deals

Joining Shea will be a dozen specialists in office, retail, industrial and investment properties.

In the retail market, commercial broker Scott Reynolds said the rate of vacancies in shopping centers and storefronts following the recession was the worst he’s seen in three decades, but the upturn in housing prices is a good indicator that retail’s fortunes are picking up.

“Retail follows residential and consumer spending,” Reynolds said.

Shopping centers in some of the region’s most affluent markets, such as Folsom and Roseville, are doing better as national chains come to the area seeking favorable rents, he said. “There are chain retailers that have weathered the storm and are saying ‘now’s our chance to come in and make deals.’”

Working smarter

High vacancy rates for office and industrial space won’t drop much until more businesses move to the Sacramento region, helping to soak up the excess inventory, brokers said. Burris, with SACTO, said the group’s mission is to market the region to potential employers. It is now working on recruiting European crop sciences companies to the area, he said. Last year’s opening in Davis of a 150-employee factory by Japanese toolmaker Mori Seiki Co. is a prime example of the kind of economic development the region needs for solid, long-term job growth, Burris said.

Bay Area companies seeking to expand but faced with skyrocketing rents and sales prices at home will eventually arrive, seeking office space within driving distance of their headquarters, he said. So will companies that have a strong reason to be near Sacramento, including food and agricultural enterprises.

But Sacramento’s one-time strength, that it was relatively inexpensive, doesn’t necessarily seal deals anymore,  Burris said. Companies just looking for a cheap place to do business now leap past Sacramento to Nevada or Texas.

“We’ve had to work smarter in the last few years,” Burris said. “Making the play strictly by cost doesn’t work anymore.”


By Hudson Sangree hsangree@sacbee.com

The Sacramento Bee
Last modified: 2013-09-23T07:28:40Z
Published: Sunday, Sep. 22, 2013 – 12:00 am
Last Modified: Monday, Sep. 23, 2013 – 12:28 am

Call The Bee’s Hudson Sangree, (916) 321-1191.

Read more articles by Hudson Sangree

FHA Trims Waiting Period for Borrowers Who Experienced Foreclosure

 

The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter the market in as little as 12 months, according to a mortgage letter released Friday.

 

Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHA loan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.

 

For borrowers who went through a recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

 

In order to be eligible for the more lenient approval process, provided documents must show “certain credit impairments” were from loss of employment or loss of income that was beyond the borrower’s control. The lender also needs to verify the income loss was at least 20 percent for a period lasting for at least six months.

 

Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.

 

According to the letter, recovery from an economic event involves reestablishing “satisfactory credit” for at least 12 months. Criteria for satisfactory credit include 12 months of good payment history on payments such as a mortgage, rent, or credit account.

 

The new guidance is for case numbers assigned on or after August 15, 2013, and is effective through September 30

Enhanced by Zemanta

April Median Home Prices on the Increase

Great News for the Sacramento area real estate market.  April, 2013 Home Sales Prices are on the increase.  Check on detailed information in this article in the Sacramento Bee:

Sacramento County‘s median home resale price up nearly one-third

Published: Thursday, May. 16, 2013 – 12:00 am | Page 6B
Last Modified: Thursday, May. 16, 2013 – 7:53 am

In Sacramento County, the median price of detached resale homes rose by nearly a third in April compared with the same month a year before, DataQuick reported Wednesday.

The median price of resale homes in El Dorado County jumped by about 33 percent last month compared with April 2012. Placer and Yolo counties also experienced double-digit percentage gains, the San Diego-based real estate information service said.

“These eye-popping increases in medians remain a function of two things: home values going up because a lot of people are trying to buy in a supply-constrained market … and we’re seeing a lot more move-up activity,” said DataQuick analyst Andrew LePage.

The median is the price at which half of houses sell for more and half sell for less. Factors that influence it include the mix of homes sold.

Last year at this time, investors snapping up foreclosures dominated the region’s market. Today, foreclosure sales have plummeted and traditional buyers account for the majority of the open market, with many buying pricier move-up homes.

Sales of Sacramento County homes in the $300,000 to $800,000 range nearly doubled in April compared with the same month a year ago, while the number of homes that sold for less than $200,000 dropped by 26.5 percent, LePage said.

Median prices in all four counties also rose from March to April. In Sacramento County, for instance, the median sale price for detached single-family homes went from $162,000 in April 2012 to $208,000 in March to $215,000 last month.

Sales volume has also been picking up across the region, though the number of homes on the market remains at historic lows. Last month, the number of resale homes bought in Placer County was the most for any April since 2005, near the peak of the housing boom.

Call The Bee’s Hudson Sangree, (916) 321-1191.

Read more here: http://www.sacbee.com/2013/05/16/5424557/sacramento-countys-median-home.html#storylink=cpy

Enhanced by Zemanta

HUD-Owned Homes Expected to Increase

The following article appeared in REALTOR Magazine on April 30, 2013:

HUD-Owned Homes Expected to Surge

Daily Real Estate News | Tuesday, April 30, 2013

The U.S. Department of Housing and Urban Development is reportedly going to be releasing more of its homes to the market, which could be welcome news to buyers who have faced slim pickings in for-sale inventories.

Over the next two years, experts predict that HUD homes on the market will increase significantly as lenders work through the backlogs of foreclosures and foreclosure reviews.

“The inventory is there, [it’s] just not being released during the banks/servicers review of the loan/mortgage documents,” says Nat Genis, a HUD listing broker in Riverside County, Calif., which is already seeing an increase in HUD-owned homes.

“HUD homes are back,” Genis told HousingWire. “FHA financing went away with the ‘creative’ financing of the 80/20 loans, and now with the increase of FHA financing, these government-backed loans guarantee that if the borrower defaults, HUD will pay off the mortgage, obtain the deed, and re-sell the home.”

HUD-owned homes can be appealing because of the discounted sales price, even though they can be in poor condition often times, HousingWire reports.

HUD had 39,442 homes in its REO inventory nationwide as of Feb. 28, 2013—with 20,536 of those having pending contracts on them, according to HUD.

SOURCE: Housingwire (04/29/13)

Enhanced by Zemanta

February 2013 Homes Prices Up 22.6% in One Year

Due to the low inventory of homes available, home buyers are willing to spend more on a home, that is if they can find one to buy.   The  Sacramento area’s resale home inventory is still very low.  This time last year there were 1,766 homes sold in February 2012 compared to 1,566 sold in February, 2013.  This is an 11.3% drop in sold homes.   This has caused the rapid increase in home prices.  Sacramento’s median price for February 2013 is $192,500, Placer County $298,500, El Dorado County $283,250 and Yolo County $250,000.  New home sales are also on the increase with 104 closings in Sacramento, 86 in Placer and 14 in Yolo County in the month of February.

 

Enhanced by Zemanta

Is Cash still King??

We are in the middle of a crazy real estate market the Greater Sacramento area.  First time home buyers are being outbid by Cash Investors and Cash Buyers.    It is not uncommon to write over 10 offers for a first time home buyer in this market and sometimes still not get a home.  FHA home buyers are constantly being out bid due to the fact that they don’t have the necessary funds to pay more than the appraised value of the home and conventional buyers and cash buyers are purchasing the homes.

With this recent lack of inventory, the cash buyers are now being outbid by other cash buyers and we have seen homes selling for $20,000 over the list price.   Everyone is scrambling to find the deals only to find out that ship may have already sailed.

With spring a few month’s away and home prices on the increase, we should see more inventory coming on the market and some sellers with enough equity to move up in the market (an area we haven’t seen for many years).

Enhanced by Zemanta

Sacramento Homes Prices on the Rise

Sacramento is suffering from lack of inventory for sale.  Due to the lack of available homes, the home prices in December, 2012 are on the rise.

Figures released by DataQuick show that the median home prices in Sacramento County rose 18% in December compared to December, 2011 from $155,000 to $183,000.

 

 

 

 

 

 

 

Enhanced by Zemanta