Sacramento County Real Estate Stats for October 2012

Conventional sales continue increase; now represent over half of home sales

Conventional sales accounted for more than half of all sales this month. Since June 2008, SAR has kept track of three types of sales (REO, short sale, conventional). This began when the MLS allowed advanced search criteria to include these types of sales. REO sales reached their highest point in October 2008 when they accounted for 1,533 (or 67.2%) sales, compared to 168 (8.9%) and 450 (23.9%) for short sales and conventional sales, respectively. The breakdown of sales for this month was 200 REOs (11.6%), 611 short sales (35.4%) and 915 conventional sales (53%). Conventional sales have nearly doubled since January 2011 when they accounted for only 27.4% (340) of sales. The graph below highlights this occurrence.

Sales increased 16.5% for the month to 1,726 units sold, up from 1,482 in September. Year-to-year closed escrows are up 6.9% from the 1,614 units sold October 2011. The total value of all single family home closed escrows was $373,546,698, up 20% from $311,305,286 in September.

The median home sales price increased to $189,000, 5% up from $180,000 in September. Year-to-year, this figure is up 14.6% from the $164,900 median sales price of October 2011. The $200,000 - $249,999 price range accounts for 17.1% (294) of the 1,721 total sales this month. Homes under $100,000 totaled 191 (11%) units. Closed escrows from conventional financing (673 units or 36.4% of all sales) increased 1.3%, cash buyers increased 2.7% (682 units/36.9%) and FHA financing decreased 5.8% (359/19.4%) sales. These numbers include the 129 condo sales this month. The average amount of days spent on the market (from list date to opening escrow) decreased from 46 to 38 days; the median DOM decreased from 17 to 13.

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

Kitchens and Bathrooms Remain Top Remodeling Jobs

RISMEDIA, Saturday, October 06, 2012— A new survey released by the National Association of Home Builders (NAHB) shows common remodeling projects have increased, compared to a similar survey from 2010. The survey, released in conjunction with National Home Remodeling Month, describes the changes the remodeling market has undergone in recent years.

Remodelers report that kitchen and bathroom projects remain the most popular remodeling jobs with home owners increasingly upgrading both rooms and making major repairs as they decide to stay in their current homes longer. Nearly 50 percent of remodelers report seeing an increase in the number of home owners who undertake remodels to avoid moving compared to the 2010 findings. 

Both kitchen and bathroom remodeling projects were up 17 percent from two years ago, with bathroom remodels cited as a common job by 78 percent of remodelers and kitchen remodels at 69 percent. Since 2009, bathrooms and kitchens have switched places in popularity, with bathroom remodels moving into the top spot as the most common type of remodeling project.

“As the priorities of home owners shift, remodelers have to adjust to the needs of their clients,” says NAHB Remodelers Chairman George “Geep” Moore Jr., GMB, CAPS, GMR and owner/president of Moore-Built Construction & Restoration Inc. in Elm Grove, La. “And while the motivation behind a home owner’s decision to remodel may have changed, their desire for quality, professional results have not. Professional remodelers remain committed to the highest industry standards.”

Repairs and replacements of old components and the desire for upgraded amenities were cited as the top reasons for customers to hire a remodeler. More than 60 percent of remodelers reported increased demand for repairs and replacements of old components in the past two years, while more than half of remodelers said that the desire for upgraded amenities increased. In contrast, more than 20 percent of remodelers said there was a decrease in customers remodeling to increase home values as an investment.

In addition to kitchens and baths, other popular remodeling categories included window/door replacements (44 percent), whole house remodels (35 percent), room additions (33 percent) and handyman services (31 percent).

“Home owners are repurposing spaces and making more efficient use of their home’s square footage,” Moore says. “Whether it be young families or couples aging in their homes, people want to let their house adapt with their needs as they change over time.”

For more information about remodeling, visit www.nahb.org/remodel.

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

Rosemont Sales in October 2012 (Sacramento, Ca)

There were 22 homes sold in Rosemont in the month of October, 2012.  That is an increase from the 20 that sold in September, 2012.  Here are the addresses and specific information.

 Currently there are: 5 Active listings, 4 Active short sale listings, 27 Short Sales waiting for lender approval and 22 Pending Sales

If you would like more information (pictures, listing history, what type of sales they were, etc.) feel free to call or email and I’d be happy to provide that for you.  Call or email me if you are looking to buy or sell in the 95826 zip code.  Check back each month for the updated statistics, as I keep a close eye on the 95826 zip code, where I live and own rental property.  Let me know if there are any particular properties you have questions about. 

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

College Greens / Glenbrook Sales in October 2012 (Sacramento, Ca)

There were 23 homes sold in College Greens / Glenbrook / Larchmont / College Greens East for the month of October, 2012.  That is a large increase from the 11 sold in September.  Here are the addresses and specific information.

 Currently there are: 9 Active listings, 2 Active short sale listings, 20 Short Sales waiting for lender approval and 19 Pending Sales

If you would like more information (pictures, listing history, what type of sales they were, etc.) feel free to call or email and I’d be happy to provide that for you.  Call or email me if you are looking to buy or sell in the 95826 zip code.  Check back each month for the updated statistics, as I keep a close eye on the 95826 zip code, where I live and own rental property.  Let me know if there are any particular properties you have questions about. 

clear skies,
Doug Reynolds
 

Home Price Appreciation Helps Housing Move Forward on Road to Recovery

RISMEDIA, Tuesday, October 23, 2012— Sparked by rising home prices across much of the nation, the housing recovery is now under way, but fiscal uncertainties and other challenges could result in a bumpy ride in the coming months, according to economists participating in a recent National Association of Home Builders (NAHB) webinar on the construction and economic outlook.

“We’re seeing a more robust housing sector than many other parts of the economy,” says NAHB Chief Economist David Crowe. “One of the reasons is we have finally begun to see on a national scale that house prices are picking up again.”

Crowe cited a number of other factors that are carrying the housing momentum forward. These include:

• Pent-up household formations
• Rising consumer confidence
• Increasing builder confidence in all three legs of the industry: remodeling, multifamily and single-family construction
• Growing rental demand
• More than 100 metros currently on the NAHB/First American Improving Markets Index

However, Crowe offered several cautionary factors that continue to put a drag on housing activity at this time – including builders who are experiencing difficulties in obtaining production credit, qualified buyers who are unable to obtain mortgage loans, inaccurate appraisals, seriously delinquent mortgages that are at least 90 days late or in foreclosure, and a limited inventory of developed lots in certain markets.

Other causes contributing to uncertainty in the marketplace include the looming “fiscal cliff” that will trigger mandatory budget cuts and tax increases at the beginning of next year, pending Dodd-Frank Act regulations that are making financial institutions hesitant to lend since they don’t know how the new rules will affect them, tax reform, and the future role of Fannie Mae and Freddie Mac in the nation’s housing finance system.

NAHB is forecasting a 21 percent increase in single-family starts this year to 528,000 units and a further 26 percent climb to 665,000 units in 2013.

Multifamily housing starts are expected to rise 26 percent this year to 224,000 units and 6 percent in 2013 to 238,000 units.

Optimistic Housing Outlook
Expressing a more bullish outlook on housing and economic growth, Mark Zandi, chief economist for Moody’s Analytics, forecast that GDP growth will range in the 2 percent range this year and next and “double that growth closer to 4 percent in 2014 and 2015.” At the same time, he expects job growth to go from two million per year to closer to 3 million in 2014 and 2015.

“A big part of this optimism is the housing market,” says Zandi. “I expect 1.1 million total housing starts in 2013, 1.7 million to 1.8 million in 2014 and over 1.8 million in 2015.”

Zandi notes a range of assumptions behind this rosy forecast, including the expectation that mortgage rates would remain very low, the availability of housing credit will improve as private mortgage lending begins to pick up, and the job market gains traction as policymakers work to resolve fiscal issues, which will ease market uncertainties.

Specifically, Zandi cites three critical fiscal policy concerns:

• The fiscal cliff. If policymakers do nothing, the combination of pending tax increases and spending cuts set to take effect in January could produce a fiscal drag of four percentage points, Zandi says, which would throw the economy back into recession. “Hiring will remain weak until this is resolved,” he said.

• Treasury debt ceiling. By late February or early March, the Treasury is expected to hit its debt ceiling. A failure to raise the ceiling would prevent the U.S. government to borrow to meet its existing legal obligations, including the issuance of monthly Social Security checks.

• Achieve fiscal sustainability. Zandi says that federal government expenditures as a percentage of GDP is 24 percent and revenues is 17 percent. He said this seven-point gap needs to be slashed to closer to two percentage points of GDP. “We need spending cuts and tax revenues to narrow future deficits,” he said. “If we can’t do that, bad things will happen.”

Acknowledging that these challenges won’t be easy, Zandi says his forecast is based on the assumption that Democrats and Republicans will eventually strike a deal on these contentious issues because each side has much to lose. Democrats, he says, don’t want to see tax cuts for the wealthiest Americans and Republicans don’t like the defense cuts mandated by sequestration.

If the nation has the “political will to address the fiscal issues in a reasonable way, I think we will be off and running,” says Zandi.

A Gradual Climb to Normal
Delving into the state statistics behind the national numbers, Robert Denk, NAHB’s assistant vice president for forecasting and analysis, cited a range of differences among the states in the amount of pain suffered during the recession and the progress that is being made in recovering.

The hardest hit states -- such as Arizona, Florida, California and Nevada -- bottomed out the furthest during the downturn and still have much ground to make up.

Meanwhile, several energy producing states – North Dakota, Texas, Oklahoma, Montana and Wyoming – will be back to normal levels of housing production by the end of 2014.

On a national basis, housing starts are projected to get back to 55 percent of normal production by the end of next year and 70 percent of normal by the end of 2014, Denk said.

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

To Remodel or Not to Remodel: 7 Questions Homeowners Need to Ask Before Commencing Construction

RISMEDIA, Saturday, October 06, 2012— In the age of HGTV, home and garden magazines, Pinterest, and more, the thought of remodeling your home might be tempting. After all, there’s a lot to love about redesigning, updating, and maximizing your space. Plus, whether you’re thinking of joining the do-it-yourself crowd or prefer to let hired professionals do the heavy lifting, any number of popular TV programs and encouraging articles make home remodeling look like a piece of cake. But before you start measuring walls and making demolition plans, Dan Fritschen, founder of www.remodelormove.com, encourages you to stop a moment and really consider what you’re about to jump into. 

“Remodeling isn’t for everyone, and many times it could be a downright bad decision,” says Fritschen. “It’s well worth your time to pause and consider what your proposed project entails, and whether the commitment is worth the time, energy, and money you’ll end up pouring into it.”

So, how can improvement-oriented homeowners determine whether remodeling is a good idea or not? 

Here, Fritschen shares seven of Remodel or Move’s important considerations that can indicate whether or not to remodel. So before you launch into your own project, ask yourself these questions:

Which are we more excited about: Hawaii or hardwood floors? Yes, that updated living room you bookmarked in a magazine looks fantastic. But in the grand scheme of things, how much joy will it bring you? For instance, would you be happier with a trip to (and later memories of) a pristine white sand beach or with brand-new flooring?

“It may sound elementary, but give some serious thought as to whether you’d rather spend your time and money on a vacation or on a new and improved living space,” Fritschen advises. “Even if you don’t end up booking your trip immediately, leaning toward ‘vacation’ over ‘remodel’ is a good barometer for determining how important an updated home actually is to you. And the truth is, unless a specific renovation really is your heart’s desire, you’d probably be better off traveling than pouring money into an already-functional room.”

Are we the Joneses? It’s a fact of life: Everybody wants to keep up with the Joneses. (In fact, Fritschen says, that’s a very popular reason for deciding to remodel!) Before you hit up the hardware store, though, take a moment to consider whether or not you are the Joneses. Is your home already one of the biggest or nicest in the neighborhood? If so, it’s likely that the addition or remodel you’re planning will end up being a lot of work that won’t significantly increase the value of your home.

“If you really want to remodel because you love the design and remodeling process, then go ahead,” urges Fritschen. “But if all you really want is a bigger or nicer home and you already have the biggest and nicest in the neighborhood, it may make more sense to move to a new home that has all the features you want in a neighborhood full of larger and nicer residences.”

Can we really afford this? Even on sticking-to-a-budget-themed renovation shows, the main emphasis is on the work being done and not on the financial decisions being made. So what many homeowners fail to fully understand is that remodeling usually costs a lot, even when you’re going the DIY route and looking for bargains.

“If you’re not exactly rolling in the dough, don’t write off your remodel entirely,” Fritschen advises. “There are smart, financially savvy ways to remodel, including using money from savings, using a 203k mortgage, or refinancing and getting cash back on your home. However, if the only ways you can pay for your remodel are to tap into retirement accounts or use your credit cards, then the cost of remodeling increases significantly and is then much harder to justify. If you can’t pay for a remodel the ‘smart’ way, then it is better to wait a few years and focus on saving up the money you’ll need.”

Is the finished product worth the stress and mess? Again, this is an area in which TV shows can be misleading. Think about it: All of the chaos, frustration, debris, and stress are compressed into a 30-minute or hour-long slot. (And magazine or internet articles might not address these factors at all!) In the real world, though, even the most mellow and easy-going people can find remodeling to be a difficult process.

“The decision-making, the expense, the mess, the interruption to routines…it all makes remodeling a potential nightmare,” points out Fritschen. “So carefully consider everyone’s response to the turmoil of remodeling. If you suspect that some in your household won’t be able to effectively deal with the stress, then deciding against remodeling—or putting it off—could be a better decision.”

Is our income secure? For obvious reasons, if you aren’t sure of your income stream, spending all of your savings on a remodel isn’t a smart choice—especially when the economy isn’t exactly stable and thriving.

“If you aren’t sure about your job or other source of income for the next few years and have just enough in savings to pay for the remodel, think about waiting,” says Fritschen. “For your peace of mind, and perhaps the outcome of the project, it’s worth waiting until you have saved more or are 100 percent confident that you will have a steady income in the future.”

How long will we be in this house? If there’s a chance you may be moving soon, Fritschen says there are two very good reasons not to remodel. First, remodeling is a lot of work. And secondly, in many cases, the cost of updating your home might exceed the amount your home appreciates after the work is finished.

“In each of these cases, the only way to justify a remodel is by quality of life improvement—but if you are moving a few months or even years after the remodel is done, then you might never be able to truly enjoy the updated home enough to justify the costs,” he shares.

Is this a good investment? As Fritschen has pointed out before, in many cases, the cost of a remodel might exceed your home’s overall increase in value once the project is complete.

“I want to stress that it’s very important to know going in that you might not make money, and to be okay with that,” he emphasizes. “Do your research before making any commitments so that you’ll have a fairly accurate idea of what to expect in terms of cost and your home’s updated value. If the numbers aren’t promising and the thought of not making a clear profit when you eventually sell your home horrifies you, you might want to rethink your renovations.”

“Always make sure you have an accurate perspective on when a remodel makes sense and when it doesn’t,” Fritschen concludes. “Remember, the project should improve not only your home, but also your happiness and quality of life—without breaking the bank or driving your family around the bend. Still not sure? take advantage of the free Should I Remodel? Online Calculator at www.remodelormove.com/should-you-remodel.”

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

Sacramento Real Estate August - September 2012

Doug Reynolds, a Sacramento Area Realtor, gives a market update for August/September 2012.  The market continues to favor sellers with low inventory, multiple offers and prices continuing to rise since the beginning of the year.  Feel free to contact Doug if you have any real estate needs for selling or buying in the Sacramento Area.

clear skies,

Doug Reynolds

 

www.BHGshortsales.com