And the numbers will show exactly what trends are alive and well in that market. For example, in Sonoma County to date, sales volume is up 16.6% over this time last year, but average prices are down 4.7%.
Bidding wars are up due to extreme teaser prices for distressed properties. But 53.4% of the home sales in this county to date were distressed. Not a good sign. Median price has declined 34% from 2007, driven down by 9,131 homes lost to foreclosure or short sale since 2008.
Oh, by the way, 616 Sonoma county homes are scheduled for foreclosure auction at the court house steps just in APRIL. That's 160% more homes than are sold per month in Sonoma County in 2011. Foreclosures are the driving force of our downward price cycle. And this cycle is locked in place until foreclosures stop.
According to an economist at the Senate Housing and Banking Committee hearing, this housing crisis will last another 5-7 years. I predicted our home value decline in 2009, and have been stating that the natural and logical conclusion of this foreclosure crisis is that eventually every loan will be foreclosed. These predictions ring true.
Low priced foreclosure/short sales force whole neighborhoods upside-down in value compared to loan debt, (sonoma county currently has 21% of loans upside-down - over 29,000 loans), which forces more short sales, strategic defaults, and foreclosures. A self-reinforcing downward cycle.
Don't kid yourself or your clients. We're currently locked in a fierce price reset market. That doesn't mean buyers can't buy or sellers sell. But it does mean every agent needs to be extra smart about what advice they give to their clients.
Beware and be truthful.
I wish I could offer a more positive picture related to real estate. Like most who have been tracking the situation for a few years, it is hard to argue the facts. Although some states have been hit far worse than others, moving the abundance of real estate inventory has turned into a complex action by which most of it is out our control. The banks continue to call the shots if it makes sense or not. We are nothing more than mediators trying to bridge a rather large gap in the system.
Scott make some very real and valid points, and I also agree with Lynn not hanging up her shingle.
My favorite new quote: "Acting on information about the national real estate market is like dressing for the national weather." (Diane Flannagan) I love seeing how agents from other areas perceive the market, but we are all operating in DIFFERENT markets. I can't base decisions in northern CA based on what's happening in Illinois. There are different drivers for each area... employment sources, tourism, proximity to key developments, etc.
Perception is NOT Reality... one thing this little roller coaster of the last 2 years should have taught us, is to look beyond the fluff to the drivers beneath. Job Growth, increasing per capita income and in- and e-migration patterns.
So no double dip for me... just a slow, steady stabilization of the current market.
Using foreclosure radar one can see a very gloomy picture or a picture ripe with opportunity. Glass half full or half empty--some would say the glass was shattered a few years back!! Our market today is almost exactly 50/50 with Distressed vs. Normal Sellers. I think as long as we have 50% of sellers NOT doing anything after they sell (Banks don't buy when selling REO's and Seller's don't buy when selling via Short-Sales) our move up market, hence the mid and upper price points, are going to sag!
And as far as Case-Shiller and their constant reporting of home prices--give it a break! Hey, if you're on the market in the winter you are more inclined to drop your price and get the deal closed. Little buyers and more product means you discount the price to move product. Dah!! Tis the Season!
What? That has already happened? Oh craaaah ....
The stimulus was anemic, even at 880 bills. Wall Street destroyed several trillion dollars. Trillions more are stored in exotic boxes of financial instrument dynamite that resemble the sweating sticks of TNT that the actors from "Lost" found in the first season.
States and cities are laying off in record numbers. Government is actually shrinking.
The economy always gets worse when Republicans win, and the media is predicting a Republican sweep in the fall.
The centrist Obama administration will allow the new Republican congress to run the country into the ground in 2011, with the cynical expectation that he'll be able to win re-election in 2012 campaigning against the do- nothing 80th congress. - Oh, that was Harry Truman. -- Well it worked for Harry, it will work for Barry.
However if California allows legal pot, our states economy will rebound on that industry alone.
We will be the one bright spot. Okay not so bright. kind of smoky, hazy.
Unwavering Commitment to Service - in New Jersey
The economy in general, I fear is flat and unless there will be major changes it will be a very slow recovery!
We need industry to expand (and therefore actually creating jobs), new industry to come up, I still want to be optimistic and count on the entrepreneurial spirit of America, this should be the season for inventors, new ideas, creative production of new products and new energy sources and with that should come the enthusiasm and creative American Spirit that things will soon be much better....
But I am also realistic that all of that "good stuff" will take time to develop and produce the good results we are all hoping for!
I am not paying much attention to what the media has to say.... they are much interested in their own ratings and existence....
I like to look around my area, when I will see new constructions going up, less empty businesses and strip malls, more activity in the malls, more cars in the parking lots and more people at the cash registers, i.e. I actually have to wait to pay for anything..... then I know things are getting better, until then I hope for the American spirit, the individuals enthusiasm and creativity to take over and push forward!
All the BEST happy Selling
Your Chicago and Northern Illinois Expert
It's not media sensationalism. These are facts. Senor Obama made the mistake of giving the BigBadBanks the keys to our future. Instead of letting the banks fail like the government did in '91-92 and setting up something similar to the RTC to dispose of assets, we are stuck in the quicksand of short sales/foreclosures for the foreseeable future with NO way out.
As long as we have this albatross around our collective necks, do not expect anything but a flat-line economy, double dip, or whatever we want to call it.
Scott Miller, Realty Associates, Boca Raton, FL