A Photo of a Google Tricycle scanning a neighborhood for Google Street View

And I am not talking about the weather. Increasingly, information about US homes lives in the cloud, served up over high speed internet connections. For example, the National Association of Realtors is rolling out its own real estate database (directory) called Residential Property Resource–its goal is to provide comprehensive data on 150 million homes in the United States. (For a description and first take to the recent announcement, click here.)

Google has been moving in this direction for several years. I recently wrote about Google Map’s 3D Modeling Tool, Sketchup, and the ability to search real estate listings in Google Maps. Also, Google Street View in Google Maps simulates a 2D drive-by of many properties. Google Maps gives satellite views of most properties and their goal is to have a place page for individual structures.

So even before your home is on the market–there is already a lot of data about it on-line.

As a practical matter, if you are selling your home, make sure your agent knows how to take advantage of these tools and at the very least, is aware of how your property presents online already and that it is accurate.

I have used Google Maps to look at aerial views of country property for example, and sometimes the pin indicating the property address is literally a mile or more away from the actual location and put it in the middle of a flat vineyard rather than a scenic hillside. I know that but a potential buyer may not. Or on one country property listing I had, the pin gave a very misleading view of the house’s location in relation to the neighbors. I was able to relocate the map pin to the home site, which gave a more accurate view of the home in relation to the acreage surrounding it.

Google Street View adds a whole other dimension, literally, to the cloud view of your home.

Google actually sends people out in cars (lots of hybrids supposedly) and on tricycles to photograph neighborhoods, as in the photo above. Kind of creepy actually. Unfortunately, sometimes the photos on Google Street View are not very current, as a I discovered on one of my listings earlier this year. The home had be re-roofed and painted a year earlier but the Google Street view was a before picture which prominently featured the garbage cans and dumpster in front of the house. The listing flyer software we were using automatically included a Google Street View of the property, but it was very misleading. I was able to tweak it slightly, and chose not to link to it in my marketing materials since ultimately it was giving the wrong view of the property.

Every buyer I work with, especially the ones who are from out of town, from Marin to New York to Piedmont and Palo Alto, studies Google Maps to learn about properties that they are interested in. If they don’t like what they see, they move on. That is why it is important for you and your listing agent to know how your home looks out in the cloud because these tools will either be working for you or working against you.

(Note: the second video talks about the community effort involved in rendering the images. I wonder how much of these were done with the free tool and how much with the Pro Version?)

Which of these is the killer real estate bargain? (See the answers below–these are true stories based upon real estate sales in Sonoma County over the last year–details have been eliminated for obvious reasons.)

1) an REO (bank-owned) home in Rohnert Park/Cotati that sells for $304,000 with 19 offers. Original asking price $256,000. Nearly 20% over asking price.

2) a country property in Healdsburg with two cute cottages that nearly sells for $137,500 under asking price.

3) a country property in Sebastopol that sells for full asking price ($1,750,000) with four cash offers.

4) an REO in Santa Rosa that sells for asking price with two offers.

5) a cute country property in Sebastopol that sells in a week for 95% asking.

6) a fixer (read:teardown) with a bad floor plan on a busy street that sells after a year on the market for 50% of the original asking price.

7) a cosmetic fixer on a great lot with good bones and multiple offers, sells 5% over asking.

property someone buys from a friend of a friend before it hits the market at 10% less than the supposed listing price because the seller doesn’t want the hassle of selling or to pay commissions.

ANSWER:

1) A BARGAIN–Are you crazy? The buyers paid $48,000 over asking.

Yes but the bank significantly underpriced the property by not attributing enough value to the oversized, landscaped 1/3 acre lot with its own redwood tree and raised beds for gardening. A most unusual feature that attracted a horde of buyers. Fortunately my wonderful clients prevailed and bought a home for the price that was their target price all along. Now they have a house payment lower than the rent they were paying previously, before taxes. For their first home, a bit of country in a great commute location, with no repairs beyond their budget or skill set. It even appraised at full price.

2) A BUST: It seems like a bargain on paper, but what if the original sales price was about $175,000 too high and the property sits and sits and sits. Even with a $137,500/16% price reduction, the buyer might be paying too much. This property is still sitting on the market racking up interest and taxes.

3) A BARGAIN: A great retreat property that sold in about five minutes with a few offers in the dead of last winter. Clearly priced right to attract interest and a turnkey property with lots of staying power and redeeming value.

4) A BARGAIN: A perfect home for the buyer’s daughter and her family. The floor plan was perfect for them and the home had been largely remodeled before it went to foreclosure. Prices have moved up a few percentage points since then.

5) A BARGAIN; Gee, only 5% off list? But this property has such fabulous fundamentals: great setting, updated, close-in to town country location, privacy, it fits the buyers’ budget. Let’s face it, it is always going to be a desirable property. And the buyers will enjoy it for a long time.

6) Eventually, a BARGAIN: This property will always have the negative of being on a very busy street–but the eventual sales price justified the case for the investor who bought this property to rehab. Just don’t expect it to appreciate as much as something with better fundamentals. But it finally penciled out.

7) A BARGAIN again. This property was well marketed, the listing agent astutely priced it slightly under where she thought it might eventually sell–it inconvenienced the current owner a shorter amount of time due to the quick sale, and everyone was happy.

WHO KNOWS? What we do know is that the seller may have left money on the table by selling his property for less than it is worth, or the buyer may have overpaid. Maybe they hit it just right, but the market did not test the value of the property, so it is a bit of a gamble for both.

Maybe you get the point? A bargain is in the eye of the beholder, and not necessarily related to list price versus sold price. That says more about the skills of the listing agent then the negotiating prowess of the buyer. Sale prices of property seek the proper level when well exposed in the marketplace. Sometimes overpaying makes sense. Sometimes underpaying is still overpaying. If a property meets the buyer’s needs, fits their budget and they love the idea of owning it, then that’s a bargain.

We all remember last fall at this time. Many people put any plans to buy and sell on hold as Lehman Brothers collapsed and we seemed (as another client put it) to be headed for financial Armageddon. (!!!)

Since that time many markets, including Sonoma County’s, have been dominated by the sales of distressed properties. In our case that means properties priced under $350,000 to $400,000 dollars.

Foreclosures and short sales dominated the inventory and this year buyers have flocked to them in high numbers. As a result, prices have come up 3 to 7% in the lower price ranges since an apparent bottom in January or February of 2009.

Last winter, savvy buyers (you know who you are!), perceived a chance to drive some bargains in the winter months. They were willing to get ahead of the home buying curve before the mainstream media caught on to what was happening. Instead of competing with 10 or 20 other buyers for the same properties that ultimately sold over asking, they were able to buy homes with less competition and at lower prices.

I think something similar may be happening now for properties priced under $550,000 or so on the seller side. If you have been thinking of selling your home and “moving up” to a country property for example, there may be a nice window of opportunity for you to make the move, particularly since the revised and expanded buyer tax credit now may apply to you or the buyers of your home and put another $6,500 in your pocket. Check the links for details on these credits as they don’t apply to everyone and all situations. I suspect the media will be talking about this topic- a window of opportunity for mid-priced home sellers–over the coming months. Often the best opportunities lie in acting in advance of the mainstream acceptance of a trend. Usually the trend is months ahead of the media talk.

Certainly there is expected to be a new wave in the spring of foreclosure properties but right now there is very little inventory of homes for sale in Sonoma County between $450,000 and $550,000. And there are great bargains to be had in country property or slightly more expensive homes. In every market, there are opportunities, you just need to be aware of the current trends and be opportunistic! Granted you are not going to sell your home for what it would have fetched 2 or 3 years ago, but neither will you pay what you would have on the other end.

Here is a picture of supply and demand for single family homes between $450,000 and $550,000 in Sonoma County over the last two years. You can see that while unit sales are down 10% from 2007 at this time, the supply of inventory is down a whopping 70%!

I recently wrote about the low “Month’s Supply of Inventory” of homes for sale in Sonoma County and touched on our seller’s market, driven by homes for sale under $500,000. What does it mean to be a seller’s market these days? The best and most hilarious explanation I have seen lately was done by Kris Berg, of San Diego Castles Realty, in her movie directing debut. Scarily true.

Sales of existing single family homes fell slightly last quarter as first time buyers and investors busily snatched up entry level homes price under $350,000. At the present moment, November 2, 2009, there are only 1190 homes for sale Unit sales are down also, from priced under $500,000 county wide, versus 2,458 at the end of October 2008, meaning there are only 2.8 months of inventory supply if sales continue at their current rate. Anything under a five to seven months supply is considered to be a sellers market. Inventory is in very short supply and sales seem to be increasing even moving up to the higher price points. Please call or email me if you would like to sell your home. If you have been hesitating to sell your home because of the market, conditions may be more favorable than you think.

A few weeks ago an agent friend and I were visiting as I fed the horses one early spring evening. She was telling me of the difficulties she was having successfully securing a home for first time buyers. This a great agent with many years of experience who was working with entry level low income buyers in Sonoma County. They were looking for a home priced under $200,000 in the Santa Rosa city limits. They were pre-approved for FHA financing with the reputable lender who had referred them to my client. They are eligible for a $10,000 down payment assistance from the city of Santa Rosa which will subsidize their down payment. Their income and credit qualified them for an FHA (Federal Housing Administration) loan. Although they qualify for the federal government first time buyer $8,000 tax credit, that cash won’t reach their pockets until after the sale has closed.

This couple was competing in many multiple offer situations with all cash investor buyers or other first time buyers such as themselves. Many properties in their price range were in such poor condition that they would not meet the strict FHA property condition guidelines, and the repairs needed would have put them beyond the couple’s limited budget. I don’t know how many offers they wrote but they were not having luck.

As my friend detailed the many days and hours she spent with this couple, she said it was seeming increasingly unlikely that they would make it into the market. I paused as I asked her, “Do you think we have hit the bottom here in Sonoma County?”. She said yes–good properties are selling extremely fast and sometimes at over asking price. I had to agree. What had seemed a consistently active but still laid back market this winter was falling into high gear as the days got longer. As some of my buyer clients and I surmised in January and February, we felt that things would be much more competitive as spring arrived, and that seems to be true. In fact, the southern part of Sonoma County, in Petaluma was already scorching hot at Christmas and New Year’s time. And that same scorch-ability (sp?) seemed to be tracking north along the 101 corridor.

The sheer activity level, the vast number of first time buyers and investor clients looking for rental property, and the declining number of new listings have all been detailed here over the previous months. In December, new sales exceeded new listings for the first time in many months, and, beginning in February it seems to us that the bottom was reached and had passed some entry level buyers by.

That said, with only 3-5 homes selling over $1 Million dollars in Sonoma County between December and February, and the mid-ranges still sluggish and all over the map, it seems that properties priced above $350,000 (+-) are still seeking equilibrium. It is a real challenge in these price ranges in communities from Healdsburg to Santa Rosa to Sebastopol to know exactly where new listings this spring and summer should be priced to attract a buyer sooner than later. Clearly there have been a number of sales in all three communities this early spring that give some hope at these price points that buyers and sellers will come to terms. It seems that the properties that are successfully selling in the mid-ranges are price 10 to 20% or so below the prices of the last couple of years. Only time will tell this spring what the market has in store for mid-tier properties and upper-end properties. But the fact that the bottom seems to have been touched on the low end, bodes well for eventual market stability.

So my curiosity was piqued yesterday at our local meeting in Santa Rosa of Coldwell Banker agents from around Sonoma County (over 110 total–thought not all were there). There were approximately 4 new country properties suitable for horses annouced as up and coming, which is a pretty healthy amount and not typical. One is in Glen Ellen and sounded interesting due to the proximity to some great riding at Annadel and Jack London State Parks. (See my post on the miles of trails in Sonoma County.)It sits on 4 usable acres with a 4 BR 2 BA single story home of about 2200 sf.

Another is in NE Santa Rosa on 2 horseable acres with a 2500 sf home. This latter is a pocket listing–it will not go on MLS any time soon but is available to be seen and priced at $1.2 million.

If you are looking for 4 acres and a view home and granny unit in Sebastopol there will be a new listing meeting that description in the Sebastopol countryside coming up in a week or two. The home is about 2600 sf with 4 bedrooms and the granny (guest) unit is about 840 sf. According to the agent this is a horse property as well and will be priced at about $1,175,000.

Another up and coming property on the Sebastopol border with Santa Rosa has 4 level acres and a 2000 sf house and will be priced at $1,095,000. I know of a couple of other pocket horse property listings and have a couple of my own upcoming that are or will be suitable for horses. I will be checking all of these out as they come up, because, as a horse owner, my definition of suitable for horses may vary from an agent who is not a horse person. All land is of course not equally usable, and it depends on your riding discipline, number of horses, etc.

There is another NE Santa Rosa country property suitable for horses coming up in a couple of weeks in the very horsey and beautiful Riebli Valley (horse and wine country par excellence!). Also four acres and priced in the $1.1 to $1.2 million dollar range.

If I can provide any information for you about these or any other horse properties, please let me know!