James, sorry for my delay in response. You wrote "the question is in regards to an investment property, not an owner occupied property." Yet in your first response you wrote "Most purchases now require 30% down". I was addressing the latter comment. And, in no way represented that Fannie or Freddie was backing nonowner occ to 90-95%.
-So let me put it to you like this, I fund hard money deals all the time where the buyers only have 20% of the purchase price into the deal. I have other investors doing non owner occ with as little as 10% into the deal, credit and income allowing. Or even 100% financing, if lender allows cross collateralization or payment escrows.
-You wrote: "as for fannie and freddie doing 95% loans, who's providing the PMI...? "
well, for owner occ, as of today(and in declining markets no less):
MGIC (Mortgage Guaranty Insurance Corp) http://www.mgic.com/guides/guides.html for one.
-Furthermore some of the big box portfolio lenders are still writing 95% LPMI loans. I agree that is now much more difficult to get loans funded of that high LTV, asset, credit and income requirements have been bumped, some lenders will not take EA-1 or worse etc etc.

Lea, I appreciate you standing up for me, but I assure you, I don't need it. I never sugarcoat anything to anyone and I can handle someone's opinion. However, there has been a miss-statement of fact here, which I believe has been set straight. I think it is someone else that needs to check their guidelines.

Tue May 6 2008, 16:07

James,

I would not refer to a loan officer with such disregard to their opinion. If you have a disagreement, it is best to be polite and make your point without putting someone down or trying to make them feel less than adequate.

Tue May 6 2008, 10:24

Aaron, you answer simply exemplifies your inexperience...the question is in regards to an investment proprty, not an owner occupied property. Fannie and Freddie are not funding 95% NOO properties, check you guidelines...as for fannie and freddie doing 95% loans, who's providing the PMI...? Unless of course you're mistakingly assuming Freddie and Fannie are funding FHA and VA loans.

Wed Apr 30 2008, 16:10

I have to disagree with you on the 30% down issue James.
As a loan officer I can tell you I am still funding 100% financing deals left and right. Even Fannie Mae/ Freddie Mac only require 5%-10% for borrowers with decent scenarios. It is much more difficult to get a loan sure but not such a bleak outlook I assure you.

I concur on the slant of the trend curve but, the market is undeniably becoming tighter in the price range discussed. I personally do not believe it is near a sellers market, merely more inventory being priced correctly and thus moving but real estate is all about interpretation.

Wed Apr 30 2008, 15:49

The simple answer with out cheerleading realtors is yes and no...Very liquid investors will be out picking up properties, but it still will not heat up for for some time now. That and the fact that it is becoming all but impossible for lenders and brokers alike to fund investment properties. Most purchases now require 30% down, so regardless of the "sale pending" figures, we all know that the only number that matters is the number of home sold. And a year on year analysis shows that we are not only down over 25% from last year but many of these homes in the 275-300 price range now, were in the 310-350 price range 12 months ago.

If it's a long term investment go for it! if you plan on fixing and flipping, consult a financial planner and put your down payment in some kind of safe insured bonds and wait...

Wed Apr 30 2008, 15:27

Elizabeth could not have said it better - it is just the wild west right now for "well priced" homes under $250k. If you look at trends, you will see that certain areas have just 2-3 months of inventory in these price ranges (6 months of inventory generally represents buyer/seller equilibrium). In higher price ranges, there can be 12-18 months of inventory. That $250k number gets higher in areas like Land Park, East Sac and the like - again "well priced" is relative to the area the home is in. Sacramento is full of micro markets and all of them have their own trends.

There are lots of buyers in the market right now. I have 4 clients that have made several offers on different properties who have been outbid by investors and other owner-occupant buyers...they are all quite frustrated.

Investments are penciling again. I am getting at least 2 calls a week from out of town (mainly bay area) investors who are looking in to purchasing property. Depending on your price range, I would consider investors (and just lots of other buyers) competition.

Thu Apr 24 2008, 15:38

In West Sacramento, the figures seem to agree with Super Agent Elizabeth.

If you look on MLS under Yolo County / West Sacramento from the $275k - $200K range it returns 57 records:

24 of the 57 homes are Pending - 42%
22 of the 57 homes are AS (Active Short Sales) - 38.5%

I can only assume that if those 22 homes were not AS, they would also be pending.

Looks like sub-$275k homes are selling quickly in West Sac too.

Thu Apr 24 2008, 15:22

Elizabeth, how were you able to put the buyer in escrow before all of the offers could come in?
-----------------
Because the listing agent had not received them yet and just lowered the price in MLS. I also witnessed first-hand the parade of buyers showing up at this home with agents in tow. In fact, I made one group of buyers and agents wait outside while the buyer signed the offer inside the home, immediately after viewing it.

I know the market in Land Park well enough to know that when a home, like this particular one, has a dramatic price drop, especially in an area of high demand, other offers arrive by the weekend. Lots of agents are slower to react and feel they have the luxury of time, but that's not always true.

We wrote the offer on Tuesday, received a reply Tuesday evening, submitted a counter offer Tuesday night, very late, and by Wednesday at 3 PM had it signed, sealed and delivered. Because I live within a few blocks of the home, I asked the listing agent to come directly to my house after meeting with the seller so I could sign the counter signifying it had been delivered to me, because I named myself as the entity authorized for delivery. I was able to then make a copy for the agent, obtain the disclosures and immediately email all those documents to the buyers.

Last month, pending sales doubled in Sacramento. Inventory has been dropping. Since January, pendings have been increasing -- couple that with a steady four-month decrease in inventory, it signifies the market is changing. I'm not saying we are out of the woods by any stretch, but hot properties are flying into escrow right now. More than 60% of the sales are bank-owned homes, too.

I have some buyers who are making offers on homes before they even see them, just trying to get that edge. That $250,000 market is red hot. It's nuts.

Thu Apr 24 2008, 14:14

Elizabeth, how were you able to put the buyer in escrow before all of the offers could come in?

I've been concerned for the last several months that so many people like myself who have been renting, but wanting to buy, for years are saying that they were waiting for spring/summer. That's a LOT of people, especially combined with investors jumping back in. I'm in the -$250 market and did not want to see things turning so fast. Even if it is a momentary trend, with more inventory on the way, I'm wondering how much better the coming year could be, if any, but I'm sure a lot of other people are wondering that too.

Thanks everyone, much appreciated!!!!!!

Thu Apr 24 2008, 13:55

Investors and cash offers are swamping the -$250,000 and below sacramento market. Increase in offers goes exponetially with these folks becuase lowballers usually have 5-10 offers running simultaneously. Throw in spring and all the FTHB who have moved off the sidelines and we have what *appears* to be a sellers market.
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Please realize however the amount of monthly arm resets and subsequent forclosures will not reach its peak untill mid 2009. In other words, more inventory will continue to come in. On the other side, lending has decreased 80% or so from the peak of cheap credit in early 06' and looks likely to stay that way. You do the math
-
To answer your question though, especially choice deals will be harder to find and prices will be more resistant for the moment. Well priced properties may indeed have a slew of offers in them. Good agents will simply adapt to meet the nature of the game.

Thu Apr 24 2008, 13:40

Hi Elizabeth from Sacramento!

You are EXACTLY RIGHT! I have been trying to help my daughter buy a house in Oceanside/San Marcos areas and that is what is happening to us.
Every house under $300,000 (especially Bank Owned) has 5 - 12 Offers on them.

I don't want her to pay too much and find herself in the same position next year as Sellers are finding themselves in now!

Anyone in the Oceanside, Vista, San Marcos areas that have anything to offer us, PLEASE LET ME KNOW!
We are in the $250,000 to $300,000 range.

Thanks!
Michele M Mayer
Windermere Real Estate
760-835-5391

Thu Apr 24 2008, 13:27

Don't let anybody fool you. We are in a seller's market for homes priced under $300,000 that are in good areas and good condition. Almost every single listing like that is receiving 10 to 15 offers. It's crazy right now. And investors are going head-to-head with first-time home buyers.

My clients right now are either renters who previously were priced out of the market and can now afford to buy because the prices have come down or investors who are looking for a long-term hold investment because prices are low enough to cash flow.

Just yesterday my buyer made an offer on a home listed at $219,900. They offered $247,000 and lost out to a buyer who bid $270,000. Another buyer beat out 16 other offers on home in the Med Center last week, and ended up paying $1,000 over list price to get it. I put another buyer into escrow last night on a home that if they didn't snatch it up right then and there would have received multiple offers by this weekend.

The market is truly wild under $300K.

Thu Apr 24 2008, 12:57

Good Afternoon,
I don't think you should worry about investors just yet. There are many investors buying properties again because homes have come down so far, but there are still thousands of homes on the market. Supply is still greater than demand right now in the area. Also, my investors don't look for cosmetic fixers. We look for the fixers that are more than the average buyer can do because those homes have been on the market longer and we are able to get a better deal on them.

Thu Apr 24 2008, 12:10