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Vicki Gay's Blog

By Vicki Gay | Agent in Roseville, CA
  • Draw your own conclusions…..

    Posted Under: General Area in Roseville, Home Buying in Roseville, Home Selling in Roseville  |  April 27, 2012 12:19 PM  |  257 views  |  No comments

    Posted 4/27/2012

    The media continues to report significant declines in foreclosures and notice of default filings throughout the entire state of California. Existing REO or “bank owned”inventory continues to trickle to market with no big waves expected. FannieMae, Freddie Mac and leading lending institutions are said to have pared downtheir REO agent rosters. Short-Sales are filling the void as more favorable decision making policies and processes have gained momentum.
    Locally, in the 4-county areas that comprise the Greater Sacramento Market, Buyers are stressed. There are multiple offers in all “entry level” price points and most move up markets. Inventory and interest rates hover at historic lows while consumer confidence begins to turn. Agents are currently working with many first time buyers who feel they have waited long enough. There are also, many previous home owners entering the market after re-building their credit worthiness aftera distress sale. Meanwhile, investors maintain an insatiable demand to purchase entry level homes, all cash or with large down payments, and lease them at strong market rents.

    March, newly opened sales were up double digits year over year in: El Dorado 40%, Sacramento 36%, Yolo 22 % and Placer 19%. This continues the positive year over year pattern that began in October. Equally notable, sales above $400,000 increased year over year as follows: Sacramento 55%, Yolo 52%, and El Dorado 23%. Placer experienced 7% fewer sales in this price point which is likely ananomaly given their average sales price has moved north of $300,000.
    There are 1.6 months of inventory available in the Greater Sacramento area at the current rate of sales. Appreciation is well underway in the Bay Area and is starting to show signs in our market. Even in the $400,000 and above price point, we are limited to 4.3 months of inventory. That number is widely considered to be a Seller’s market metric. Do you really think the market is going to tank further? Please, draw your own conclusions and make your own decisions! Also, please remember that homes are primarily for friends, families and making memories!
  • Roaring into March like a Lion

    Posted Under: Market Conditions in Roseville, Home Buying in Roseville, Home Selling in Roseville  |  March 16, 2012 6:53 PM  |  283 views  |  No comments

     

    Significant, year-over-year growth in new purchase contracts continued its run straight through February and into March. This sales trend, as well as historically low inventory levels, is causing many people to believe the Greater Sacramento Real Estate Market is truly bouncing around rock bottom.

     

    Four core counties enjoyed the following individual, new-sale increases in February of 2012 versus February 2011: El Dorado 46%, Sacramento 43%, Placer 38% and Yolo 26%. The combined counties also experienced a 1% increase in average sales price, which closed at $214,000.

     

    Equity and Short-Sale contracts continued to grow as a percentage of both closed escrows and new sales, while bank-owned (or REO) listings persisted in their decline. These new sales contracts for February broke down as follows: Equity 33.4%, Short-Sale 43.4% and REO 23.2%. The rates of default and foreclosure also continue a slow but steady decline both nationally and locally.

     

    Months of inventory remains an uneasy yet compelling topic. This metric reflects how swiftly inventory will deplete at the current rate of sale and zero new listings. Our four counties currently reveal the following: Sacramento 2.0, Placer 2.1, Yolo 3.0 and El Dorado 3.5. The combined inventory is a convincing 50% less than February 2011.

     

    There is just one additional vital sign on the rise. 303 new sales over $400,000 marked a 44% improvement over January and a 32% increase over February of 2011. Here are the Cliff Notes: prices are low, interest rates are low, inventory is low and multiple offers are high. So if you are a Buyer, it’s definitely time to get busy. Homeowners with little or no equity might also consider making their move since prices and accompanying interest rates are certain to climb. It may just be the best time to secure your dream home.

  • Where are they hiding that....

    Posted Under: Market Conditions in Roseville, Home Buying in Roseville, Home Selling in Roseville  |  February 23, 2012 5:16 PM  |  350 views  |  No comments

    ...Shadow Inventory!

    Continued low inventory coupled with a substantial increase in sales, provides an intriguing start to 2012 in the core counties that comprise the Greater Sacramento Area. 3,417 new sales contracts in Placer, Sacramento, El Dorado and Yolo counties represent a 39% increase over the same month in 2011 and a 44% increase compared to December’s figures. New contracts for short-sale transactions represented close to 48% of the total sales in Sacramento, Placer & Yolo and over 40% in El Dorado County. Bank owned, or REO sales, have dropped dramatically in the four county areas from 39.6% of sales in January, 2011 to 23.6% in January, 2012. This begs the question: where is the alleged "shadow inventory" hiding?

    Months of inventory, which is calculated by the rate-of-sale compared to standing inventory, compares as follows: Sacramento 2.4, Placer 2.8, Yolo 3.2 and El Dorado 4.7. Signs of a neutral real estate market typically include 4-6 months of inventory. Less than 4 months is typically deemed a "Seller’s Market". Uncertainty around the amount and release of bank owned inventory however, combined with low equity for non-distressed homeowners, makes 2012 supply forecasts very challenging to predict.

    The erosion in average sales price appears to be slowing and finished in January 2012 accordingly: Sacramento $180,000; Placer $282,000; Yolo $232,000. El Dorado County closed out at $317,000; 5% above January 2011.

    Agents are experiencing multiple offers in all market areas and most price points when the property is appropriately positioned. Our market will remain heavily dependent upon a steady stream of short-sale listings and equity sellers who are willing to take advantage of low prices and interest rates on their next purchase. Lending seems to be opening up with slight improvement in loan to value requirements and monthly earning multipliers that determine maximum loan amounts.

    An old cliché states: a bell does not ring when we hit rock bottom. Many experts do believe, however, that we will experience a small but steady improvement in number of units sold and price point this year.

  • 2011 Ends with a Bang!

    Posted Under: Market Conditions in Roseville, Home Buying in Roseville, Home Selling in Roseville  |  January 15, 2012 11:59 AM  |  564 views  |  4 comments

    December set the table for a very solid start to the 2012 real estate market in the 4-core counties of which comprises the Greater Sacramento Area. 2,790 new contracts in Sacramento, Placer, El Dorado and Yolo counties represents a 3% increase over November’s number and a whopping 56% increase compared to December of 2010. 45% of these new contracts consisted of short-sale transactions. This signifies a continued trend among note holders to mitigate institutional losses and also allow distressed sellers to rebuild their financial lives more swiftly.

    Another bright spot appears in the price range of $400,000 and above. Although 182 sales represented a 10% dip from November, it still maintains a 26% increase over December 2010. Consider again, the strength of November and December open contracts combined to be optimistic about the first quarter of the New Year.

    Supply side economics will focus your attention on a glaring issue. Months of inventory, which is calculated by the rate of sale compared to standing inventory, compares as follows: Sacramento 2.0, Yolo 2.3, Placer 2.5 and El Dorado 3.4. This represents a continued downward trend with notable month-over-month and significant year-over-year decreases.

    Agents and Buyers alike continue to hope for more of the REO or Bank Owned listings to hit the market. Otherwise, they will be heavily dependent upon a steady stream of short-sale listings and successful negotiations with existing lien holders. Review of these metrics might suggest that housing prices will begin a slight rise. Other factors, such as consumer confidence, unemployment and interest rates will also have an impact. Many experts believe that we are bouncing around market bottom and could see a small but steady improvement in number of units sold and price point in 2012.

  • Short Sales Continue to Dominate the Market

    Posted Under: Market Conditions in Roseville, Home Buying in Roseville, Home Selling in Roseville  |  January 3, 2012 10:13 AM  |  533 views  |  No comments

    Posted 1/3/2012

     

    There was another slight increase in the number of overall closed sales in the four county area of Sacramento, Placer,El Dorado and Yolo counties. Sales were up 8% from last year indicating improved activity. The real news however was the dramatic shift in the number of closed Short Sales versus closed REO’s. Short Sale closings rose sharply; showing a 38% increase over last year, while REO closings were down 13% over the same time period. This trend is indicative of a shift in how many banks are approaching distressed property inventory. Since distressed properties represent the majority of sales right now, banks have hired more highly-trained staff to expedite the process. There also seems to be a general consensus in the bank community that negotiating a short sale can minimize the bank’s costs and properties are better maintained than with a foreclosure.

    Overall, the percentage of distressed sales (Short Sales and REO’s) represented nearly 70% of all closings. More than two out of three closings were in the distressed category; the highest percentage this year.

    The average price and the average price per square foot were also down sharply with Short Sales and REO’s down in number by 14% and 13% respectively. The inventory for Short Sales was down 33% from last year while the REO inventory was down 23%. This reflects a continued vigorous market of buyers snapping up the extraordinary values with low prices and historically low interest rates.

    On the other hand, closings on sales over $400,000 were down 25% from the prior year. In a traditional sales market this would be indicative of a seasonal trend.
  • Short Sales and REO’s Continue to Drive the Market

    Posted Under: Market Conditions in Roseville, Home Buying in Roseville, Home Selling in Roseville  |  November 18, 2011 2:25 PM  |  594 views  |  No comments

    Posted 11/18/2011
     

     

    We saw a respectable overall increase in activity during the month of October in the four-county areas of Placer,Sacramento,El DoradoandNevada, compared to last year with closed sales up 14%. Once again the bulk of the activity was in the distressed sale category with Short Sales up 31% and REO’s up 7% compared to the prior year. Sales over $400,000 represented fewer than 10% of overall sales and were down 5%. The average price for the four-county area was down 10% from last year, dropping from $241,000 to $217,000. Distressed sales (REO and Short Sales) represented 62% of closings for the month.

     

    It is understandable why we are seeing a very active market in both REO and Short Sales when you consider that the average price per square foot of a traditional sale is around $170 while the average price per square foot for Short Sales ($111) and REO’s ($97) are so much lower. Even though these distressed properties often come with work required, the extraordinary values combined with record low mortgage rates continue to be the driving force in the market.
  • Interest Rates continue at Historic Lows

    Posted Under: Market Conditions in Roseville, Home Buying in Roseville, Home Selling in Roseville  |  October 25, 2011 2:21 PM  |  560 views  |  No comments

    Brisk sales continue to be the story in the REO sector for the four-county region of Sacramento, Placer, El Dorado and Nevada. REO closings were up 3% over last year and there is less than two months inventory on the shelves. With the REO average sales price hovering around $168,000, and price-per-square-foot at about $100, properties are being snapped up at a record pace. The average REO sales price has declined 11% from last September and the price per square foot has dropped 8%. Nearly 60% of all closings in August were distressed sales (33.8% REO and 26% Short Sales). The short sale average sales price of $215,000 was down 7% and average price per square foot of $110 was down 6% from a year ago.

     

    Conversely, while homes over $400,000 represented only 8.8% of the closings, they experienced an increased average sales price ($565,000) and increased average price per square foot ($172); up 5% and 3% respectively from a year ago.

     

    There are a few factors contributing to this phenomenon. Interest rates continue at historic lows; hovering around 4%. In addition, the greater Sacramento area is experiencing a 72% affordability index, which represents the percentage of households that can afford to purchase the median priced home; its highest level in decades. This combination of low prices, low interest rates and high affordability has created an unprecedented opportunity for people who want to buy a home and plan to stay in it for a long time.

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