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
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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

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

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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)

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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).

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More Cash Sales, Shrinking Time on Market Show Changing Buyer Dynamics

Media Contact: Sara Wiskerchen / 202-383-1013 / Email

ORLANDO (November 10, 2012) – All-cash buyers have surged since the housing downturn while the typical amount of time it takes to sell a home is shrinking, revealing the changing dynamics of today’s home buyers and sellers.

Academic experts took a closer look at cash buyers and how time-on-market impacts home sales during the “Changing Dynamics of Recent Home Buyers and Sellers” session today at the 2012 Realtors® Conference and Expo. Funding for the research was provided by the REALTOR® University Center for Real Estate Studies.

“We’ve seen a tremendous increase in cash buyers since the housing downturn that we haven’t seen before in history,” said Lawrence Yun, chief economist of the National Association of Realtors®. Yun said a decade ago all-cash home purchases were less than 10 percent of the market but have increased steadily since 2008, to as much as 30 percent of sales.

Yun said the increase in more buyers paying cash for real estate reflected tight lending conditions and an increase in investor sales, which account for the bulk of cash sales. Increases in the number of international buyers, who often have financing difficulties when purchasing a home in the U.S., are also adding to the rise in cash sales. NAR research shows that 62 percent of international purchases were all cash; the percentage has continually increased since 2007.

Recent NAR research on down payment sources may offer insights into how cash buyers are receiving funds for home purchases. According the 2012 NAR Home Buyers and Sellers Profile, 40 percent of repeat buyers use the proceeds from the sale of their primary residence as a source of down payment, but downsizing boomers may have enough equity left from their home sale to pay all cash for their next purchase. Yun also noted that one in 10 buyers rely on proceeds from the sale of stocks or 401K disbursements for down payments; those with stable jobs and who saw investment gains in recent years may be using those cash funds to buy a home outright rather than financing the purchase.

Dr. Grant Ian Thrall, president of the American Real Estate Society, agreed that cash sales have increased dramatically in recent years. Thrall spoke at the session and conducted an in-depth market analysis to gain greater insights into cash buyers.

“Research shows a bias toward cash sales for newer and lower priced homes,” Thrall said. “Many of those sales are occurring within the first 60 days that the home is on the market, and more than half sold within the first 120 days.”

Thomas Springer, professor of Finance and Real Estate at Clemson University, discussed how time-on-market responds to employment changes and varies with shifting market and economic conditions. Springer analyzed market data from more than two dozen metro areas.  His findings indicate that, at the property level, time-on-market is a function of property characteristics, price and market factors; however, at market level, time-on-market is a function of local, national and global economic and market factors.

Springer determined that time-on-market is a possible indicator of market conditions or risk and that in a vibrant market, time-on-market is shorter, whereas distressed markets often have a longer average time-on-market.

Yun said that tightened inventory conditions are also impacting time-on-market, which has steadily decreased nationally since the start of the year, as are home buyers’ search processes.

“Tightened inventories in some places mean homes are selling more quickly and reducing time-on-market,” Yun said. “Our research shows that last year, home buyers saw 10 homes before buying, down from 12 the year before, and more than half of buyers reported that finding the right home was the hardest part of the home search process.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

Who said Real Estate isn’t a good investment?

Sacramento‘s Real Estate Market has been one of the Nation’s worst hit areas with Foreclosures and Short Sales.   It appears that the bottom of the market came and went overnight and home prices are on the increase again.   In the event you missed this article in the Sacramento Bee check it out on who’s buying up a lot of the local Real Estate.

Article:

BIG INVESTMENT FIRM BUYS HUNDREDS OF HOUSES IN SACRAMENTO AREA

 

 

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What’s going on in the Greater Sacramento Real Estate Market

Sacramento Regional Real Estate Trends for November 17, 2012

Summary Of Changes for Sacramento County
Week of 2012-11-17 Since 2012-11-10 Since 2011-11-19
Direction # % Direction # %
Inventory 1854 Down -39 -2.1% Down -4582 -71.2%
Median Asking Price $210000 Down -$5000 -2.3% Up $51000 32.1%
Average Asking Price $269350 Up $3583 1.3% Up $76333 39.5%
Average Asking Price Per SQFT $149 Up $3 2.1% Up $36 31.9%
SIT Inventory 495 Down -22 -4.3% Down -2378 -82.8%
FIT Inventory 63 Down -4 -6% Down -280 -81.6%
New Listings 429 Down -57 -11.7% Down -305 -41.6%
Price Drops 95 Down -25 -20.8% Down -318 -77%
Price Increases 12 Down -2 -14.3% Down -27 -69.2%
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Changes in the Market

If you haven’t seen this article that was written by Lawrence Yun who is chief economist of the National Association of Realtors, please read:

Seeds of a Housing Shortage

Sliding inventories and price increases could lead to overheated markets
October 2012 | By Lawrence Yun

The market is looking much improved today, with home sales and prices heading up. But within this improvement are the seeds of a long-term challenge: falling inventories.

The inventory of existing homes is at its lowest level in seven years, while newly constructed home inventory has hit a 50-year low mark. Falling inventory is causing home prices to shoot up higher and faster than most analysts anticipated. The national median price of transacted homes was up 9.5 percent in August. Other price measures, like Case-Shiller and the Federal Housing Finance Agency price index, which look at price changes in sales of the same properties over time, have been rising as well, at double-digit annualized rates in recent months. Of course, not all markets are this robust. Phoenix is looking to notch a 25 percent gain for the year, while Chicago is just emerging from negative territory.

Thank you for voting!

As winter approaches, inventory will slide further. Few homes are newly listed after Thanksgiving. Historically, inventory tends to be 15 percent lower in winter than summer. Last year’s seasonal decline was even more dramatic, at 25 percent. We hope we won’t see an inventory decline of that magnitude this winter. Home values rising much faster than income growth will markedly cut into housing affordability.

But that may well be what’s in store. Distressed home listings will continue to fall because fewer borrowers are now seriously delinquent. Home construction is up, but only reaching half of the historic average of housing starts. Even the many pent-up sellers—those normal, non distressed home owners who’ve been holding back for better market conditions—will not help the net inventory situation, because most of them will be selling to buy a trade-up property.

Slight seasonal relief should come in March, just as the spring buying season gets underway. But a deeper and longer-term issue to watch out for is the increasing possibility of a housing shortage across many parts of the country.

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Article Posted on Zillow – 1 in 3 homeowner’s underwater

Image representing Zillow as depicted in Crunc...
Image via CrunchBase

Great Article posted on www.zillow.com that I wanted to share.

One in three mortgage holders still underwater

By John W. Schoen, Senior Producer

Got that sinking feeling? Amid signs that the U.S. housing market is finally rising from a long slumber, real estate Web site Zillow reports that homeowners are still under water.

Nearly 16 million homeowners owed more on their mortgages than their home was worth in the first quarter, or nearly one-third of U.S. homeowners with mortgages. That’s a $1.2 trillion hole in the collective home equity of American households.

Despite the temptation to just walk away and mail back the keys, nine of 10 underwater borrowers are making their mortgage and home loan payments on time. Only 10 percent are more than 90 days delinquent.

Still, “negative equity” will continue to weigh on the housing market – and the broader economy – because it sidelines so many potential home buyers. It also puts millions of owners at greater risk of losing their home if the economic recovery stalls, according to Zillow’s chief economist, Stan Humphries.

“If economic growth slows and unemployment rises, more homeowners will be unable to make timely mortgage payments, increasing delinquency rates and eventually foreclosures,” he said.

For now, the recent bottoming out in home prices seems to be stabilizing the impact of negative equity; the number of underwater homeowners held steady from the fourth quarter of last year and fell slightly from a year ago.

Zillow map: Where homes are underwater

Real estate market conditions vary widely across the country, as does the depth of trouble homeowners find themselves in. Nearly 40 percent of homeowners with a mortgage owe between 1 and 20 percent more than their home is worth. But 15 percent – approximately 2.4 million – owe more than double their home’s market value.

Nevada homeowners have been hardest hit, where two-thirds of all homeowners with a mortgage are underwater. Arizona, with 52 percent, Georgia (46.8 percent), Florida (46.3 percent) and Michigan (41.7 percent) also have high percentages of homeowners with negative equity.

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